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UNITED STATES OF AMERICA. 



A BREED OF BARREN METAL 



OR 



CURRENCY AND INTEREST 



A STUDY OF SOCIAL AND INDUSTRIAL PROBLEMS 



BY 



J. W. BENNETT 



"First freedom and then glory; when that fails, 
Wealth, vice, corruption, barbarism at last." 




CHICAGO 

CHARLES H KERR & COMPANY 
175 Monroe Street 



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Copyright 1895, by 
J. W. BENNETT 

Bight of Translation Reserved 



library of Progress, No. 16, Quarterly, $1.00 a year. August, 1895 

Entered at the Postoffice, Chicago, as second class matter. 



CONTENTS. 

PAGE 

CHAPTER I 13 

Introduction — The importance of studies in sociology — Man a social animal — 
The correct method — Social and economic, compared to physical science- 
Natural law the foundation of both — All science speculative — Happiness the 
object of existence — Happiness development — Must be general — Ideal state is 
happiness to all — In sociology as well as art and science the ideal is the standard 
— The ideal is that which corresponds most closely with natural law — Natural 
law must be obeyed — The first business of social and economic science is to find 
underlying natural principles — Ethics the foundation of these sciences — Present 
practices and institutions to be tested by ethical axioms — Unsatisfactory results 
to be explained by economics — Knowledge for the use of man. 

CHAPTER II i 9 

Disastrous Phenomena— Periodic panic— Distress of laborers— Paralysis of 
business — Borrowing by the government in times of peace and prosperity — 
These phenomena seemingly occult — Varied explanations contradictory and 
unsatisfactory — Periodic distress seemingly incident to our industrial organiza- 
tion — The optimist-conservative— His absurd empirical restrictions to the use 
of intelligence — The conservative a real anarchist as to all but police power — 
His inconsistency— His dogmatic stand — The mass of citizens think otherwise. 



CHAPTER III 



24 



The Distribution of Wealth — Distribution dependent on the elements enter- 
ing into the production of wealth — What these elements are— Land, the Laborer 
and Capital— Problem, to ascertain what portion of product goes to Landlord, 
Laborer and Capitalist— The term "Laborer" defined — Wages defined. 

CHAPTER IV 28 

The Laborer— Is he overpaid?— What he receives — What it costs to live — Com- 
mon experience rather than made conditions— The census figures— Bread and 
soup economists— The pay of clerks— The remuneration of laborers— Farmers 
— The remuneration of sweaters and shop girls — The social evil and its rela- 
tion to wages — A reform work for women — The army of unemployed — The con- 
clusion that the remuneration of the laborer is not too great — If he is entitled 
to more, he needs it — The only means by which higher wages may be paid. 

CHAPTER V 33 

The Margin of Profits— Some figures on the actual shares of the products of 
industry received by the several classes — Mr. Atkinson's cotton mill — The 
share of the laborer — The remainder goes to keep up wealth and remunerate 
the capitalist and landlord — Ten to fifteen per cent upon capital employed, 
the probable margin of profits — This includes interest and rent — It applies to 
successful enterprises only- -Census figures— Their indefiniteness— The margin 
small — To whom shall it go? the vital question. 

5 



O CONTENTS 

PAGE 
CHAPTER VI 35 

The Landlord — His right to remuneration — Land defined — Ricardo's definition 
— The significance in which it is here used — Mines not land in the same sense 
as farming land or building sites — Forests not land, unless cultivated — The 
natural basis of property — What one produces is primarily his own — What he 
does not produce or what another produces is not primarily his own — Land 
not produced by individuals — Does not belong to individuals — Belongs to the 
community in usufruct only — Community can give no greater title than it 
possesses— The collection of rent does not aid productivity — No return given 
by landlords for rent taken — An imposition — Royalties in the same category — 
Landlords and royalty- takers levy a billion of dollars or more per year on in- 
dustry — They take that much of the annual product — It does not justly belong 
t o them, must therefore belong to laborer or capitalist or both. 

CHAPTER VII , 39 

Terms — The necessity for an exact use of words— Wealth, capitalist and laborer 
defined — Interest and capital — Profits — No necessity for distinguishing between 
them in this inquiry — Arguments based on an ambiguous use of terms — Capital 
held to be labor — The use of terms in their ordinary signification not so neces- 
sary as their use in the same signification in the same discourse — Is capital 
stored labor? — The fallacies based on this erroneous conclusion — A jugglery of 
terms— Neither capital nor labor has rights— Rights belong to persons, not 
things— The basis of the capitalist's claim for remuneration — The basis of the 
laborer's claim. 

CHAPTER VIII 44 

Is Wealth Essentiallt Productive — The observed essential principle of 
decay in all wealth — Specific instances — The pyramids — Rome — A dynasty of 
kings— Articles of common use— The life of a machine— Without the exertion 
of the laborer the country would turn into a wilderness — What we eat and drink 
and wear — We live from hand to mouth— The independence of the capitalist — 
Labor alone the preserver of wealth — No exception to the rule of decay in 
wealth — Interest-taking must be founded on the assumption of the spontaneous 
growth of wealth— The absurdity of the assumption. 

CHAPTER IX 51 

The Productive Power of Wealth— Instances and objections— Is capital 
productive? — How it differs from wealth — The productive power of a machine 
— Interest not a charge for a machine's effectiveness — Interest a charge for use 
of wealth — Is the borrower alone benefited by that use?— Men should be paid 
for what they relinquish, not for what they can extort— A scientific test of the 
productive power of wealth — How we determine the cause of steam — The ver- 
dict against the productivity of wealth— Wealth an advantage to the laborer, 
but that is not the question— The toiler is heir to all the ages, has a right to the 
use of ideas of inventors applied through wealth— Unfinished product— Other 
instances of decay not growth in wealth— The house— The mill— The horses. 

CHAPTER X 60 

Objections and Instances Continued— The argument of Bastiat— Its import- 
ance— Founded on the assumption of spontaneous productivity of wealth — 
Reciprocal services— The mistakes of Bastiat— Money not wealth— Bastiat's 
illustrations — The house and ship— The crowns and sixpences— Mondor's 
house— Peculiar conditions — Malthurin and the sack of corn— The same old 
fallacy — Malthurin and the man with eggs — James and the plane — The interest- 
taker's demands—What he gives up— The power of wealth and the laborer con- 
trasted — In the light of man's origin— Thora's question as to crowns and 
Bastiat's answer— Spontaneous growth again— The advantage of the interest- 
taker as told by Bastiat— The conclusion drawn therefrom— Indefinite and 
fixed remuneration— Hoarding— Our addresses to laborer and capitalist— In- 
terest generally applied — Things making themselves— Modern necromancy. 



CONTENTS 7 

PAGE 

CHAPTER XI 75 

Objections Continued — Without interest, it is said, there would be no motive 
for saving— The falsity of this proposition pointed out — A sufficient motive- 
Will the capitalist lend without interest? — The reason why he will, if he cannot 
get it— The effect upon the producer of the discontinuance of interest-taking— 
The only remedy for low wages. 

CHAPTER XII 80 

Interest-taking Wrong— A scientific test — Phenomena explained — Industrial 
panics— The rapid accumulation of wealth in the hands of the few— Poverty of 
toilers, etc., etc. 

CHAPTER XIII 82 

Financial Panics— The explanation of their causes— Rent and interest charges 
too large to be met — What they are — What we have to meet them — Country 
compared to a great business concern — The difference — Estimates and figures 
— Interest concluded to be the cause of financial distress — Another way of 
reaching the same conclusion — Objections — Necessary charges of production — 
What is saved by wage-earners— A summing up. 

CHAPTER XIV 97 

The Social Extremes — Why wealth accumulates so rapidly in the hands of a 
few — Is it for services rendered by the rich?— What they do to serve the produc- 
ing masses — The method of accumulating a fortune — Explanation of the in- 
crease of wealth — The same in detail— Industrial and financisl groups — What 
figures show — How wealth is transferred — The rapidity of the process — 
Checks. 

CHAPTER XV 104 

Extreme Poverty — What the interest-taker demands — What he receives — Its 
effect on the toiler — The yearly product limited — No way of increasing the 
share of the laborer without diminishing the share of some one else — How 
limited inquantity the product is — Make producers of non-producers. 

CHAPTER XVI.. 108 

Improved Machinery — Its failure to ameliorate the condition of the laborer — 
Wages now and in 1450 — The increased producing power of the laborer — Why 
does he not get the benefit of this power?— Interest-taking is to blame — The de- 
mands of interest increase geometrically, producing power does not — Capital- 
ists take all increase — The inventor not rewarded — Men are thrown out of 
employment, and competition keeps wages down so that the capitalist can take 
all increase. 

CHAPTER XVII in 

The -Large Salaries of Non-Producers — How accounted for— The limit of 
tangible production — The wages of superintendents— Measure of remuner- 
ation — The principle that one has a right to all that he can get — The measure of 
remuneration thereunder — Brain work — The standpoint of the discussion — 
The great money-getter — Remuneration for mental and physical exertion — 
The lawyer — The doctor — The literary man — Works of art — The inventor — The 
range of talent— Ability — What is the source of large incomes— Are the people 
interested in the size of salaries of private coporation officials? — Wealth and 
its responsibilities. 

CHAPTER XVIII 123 

Work a Boon— Involuntary idleness— Extraordinary expenses incurred in times 
of financial distress — Why they seem to help the condition of the country. 



CONTENTS 



CHAPTER XIX 125 

War and Prosperity — Their connection explained — Historical testimony — The 
war spirit and slavery — Revolution. 

CHAPTER XX 127 

Wealth and National Stability— Why great wealth has proved destructive to 
great nations— The basis of national integrity — Wealth and the means of get- 
ting it. 

CHAPTER XXI 129 

The Yeomen of America — The passing of the independent farmer — The change 
in the character of the agricultural class— Causes — A peasantry being 
formed — Danger to institutions — How it may be avoided. 

CHAPTER XXII 133 

Mortgage Indebtedness — Its rapid increase — Is it an evidence of prosperity?. — 
Arguments to that effect analyzed— Debts and assets — Increase in wealth as a 
whole not necessarily a sign of national prosperity — A specimen of plutocratic 
reasoning- Figures as to the relation of farm-mortgage debt to prosperity — 
Value of product, not of capital, the measure of debt-paying power — Census 
figures analyzed — The conclusion — Mortgage debts in general — General con- 
clusions. 

CHAPTER XXIII 140 

Historical Testimony — The wrong of interest-taking always recognized by 
thinkers— The Mosaic law— Objections — The Greeks— The Romans— The 
medieval Church— The early Church — Europe of the Middle Ages — Reformers 
and usury— Shakespeare's idea — The Jews and the movements against them — 
Legislation — Penal statutes — Prohibitive statutes— The statute of Queen Anne — 
France— General conclusions— Objections— The fact of a thing having existed 
no proof of its righteousness. 

CHAPTER XXIV 149 

Accumulated Wealth— It may be used as a means of exacting interest — The 
necessity of borrowing — Millions born into the world without wealth —Tools and 
machinery scarcely less necessary than land — The necessity of borrowing in 
the commercial world — Interest-takers control the currency — Glut and over- 
production — Supply and demand — Illustrations. 

CHAPTER XXV 155 

Our Currency System — The effect of hoarding continued- -How it cripples in- 
dustry — An illustration — Results— Interest divided— Symptoms and causes — 
The adaptability of our present currency to the ends of the usurer — Value and 
volume — Metallic currency inadequate in volume to the country's needs- 
Figures — Volume of circulation here and in Europe— Gold product all neces- 
sary to supply the arts — Fluctuation in value and volume — Has the price of 
gold appreciated? — Silver — The single silver standard — No commodity can be 
made a non-fluctuating money standard— Value and supply and demand — Our 
currency well adapted for fluctuation — Redeemable currency — Demonetization 
of silver— Bimetallism — A will-o'-the-wisp — Gresham's law — Composite stand- 
ard — Evils of fluctuation. 

CHAPTER XXVI , 168 

Our Banking System — The bank as an instrument for controlling currency — 
Money a close monopoly — Its effect — The importance of governmental con- 
trol of the currency — Fraud or cunning, and force — The effectiveness of the 
bank — The weaknesses of the banking system — Its effect on the community — 
Action of banks in time of panic — Their withdrawal of money from trade — A 
souud currency system — The present banking system from the standpoint of 
financiers — No solution for the currency question while the banking system 
is controlled by private individuals — Banking the peculiar province of govern- 
ment. 



CONTENTS '9 

PAGE 

CHAPTER XXVII , . . 172 

A Real National Banking System — How it may be established — A detailed 
plan — The essential principles — Its effect on usury — Further provisions against 
interest-taking — A complete remedy. 

CHAPTER XXVIII , 177 

The System — Its practical working — Regulation of the money volume — Supply 
and demand — A convertible currency ideal — Gold and silver — A paper cur- 
rency — Coin certificates — The money unit — What fixes its value — Volume and 
the unit— Price of the metal and the money unit — Gold a constantly appreciat- 
ing money unit — A mixed currency — The value of the commodity money unit 
depends on the market price of the material of which the money is composed- 
Auxiliary currency — Silver — Intrinsic value not necessarily an attribute of 
money — The proposed money a paper money — The weakness and strength of 
paper currency — Historical instances — Paper money always resorted to in des- 
perate national crises — Metallic money always fails in time of national need — 
The bankers' proposition — The proposed currency and supply and demand — 
Incapable of fluctuation. 

CHAPTER XXIX 191 

The System Continued— The money standard of the proposed system— Gold 
as a standard — Its fatal defects — Contracts made for payment in gold — Gold 
not a standard, but a value denominator— A fluctuating standard radically 
faulty — The real standard— Objections noticed— A fixed quantity of human ef- 
fort the real standard — How to arrive at such a standard — Buying and selling— 
But two factors in production. 

CHAPTER XXX ..... 197 

Objections Answered— Impracticability— Deception in weight and measure — 
Pricesof goods — Security a deterrent to trade — A refusal to sell goods after 
money had been issued thereon — Would increase the army of office-holders — 
Political corruption — A remedy for that — The development of the principle 
of local self-government — Distrust of the people and its result — The basis of 
the spoils system— The appointive power — An irresponsible judiciary — Election 
by select bodies — The Electoral College — Money in politics — Warehouse 
receipts — Security — Bonds and stocks — Goods in transit — Revenue — Silver 
and gold. 

CHAPTER XXXI 212 

Objections Answered — Why it is necessary to have a special form of currency 
for the purpose of preventing interest-taking — Prohibitive statutes — Reasons 
why they are so often ineffective— The proposed regulation not a prohibitive 
statute in the sense that other usury laws are — Prohibitive statutes not always 
ineffective — The testimony of Bentham — The statute of Queen Anne — Testi- 
mony as to effectiveness — The sort of a usury law whichwould not be ineffec- 
tive — Specific provisions — Has the state a right to regulate contracts between 
citizens? —It is done every day — Bentham — Hoarding money — How it may be 
prevented — Specific provisions — Adam Smith — All interestwrong— The borrow- 
er's profit — Will interest-taking cease of itself?— Is interest falling? — Is risk 
the basis of excessive interest?— Observed facts. 

CHAPTER XXXI 1 224 

Interest-Taking and Wage-Earners — The conclusion — But one way of in- 
creasing wages — Must strike at unearned incomes — These must be reached 
through interest-taking — Capital profits unearned— Something for nothing — 
The laborer and Malthus. 

CHAPTER XXX III 227 

A Feasible Currency System — Some of its advantages — A destroyer of usury- 
Vested interests— Our reform friends— The single-tax — Its theory and practice 
— The dilemma of the assessor— Exchange value of land— Land reform not a 
panacea — The single-tax theory from a philosophical standpoint— Land and 
minerals — The postal savings bank. 



10 CONTENTS 



CHAPTER XXXIV 239 

Results — The destruction of interest-taking — What would follow — Division of 
wealth — Not fanciful — The advantage of the possessor of surplus wealth— Its 
results — The problem we must solve— Important natural truths— Applied— The 
rank and file of toilers — They must work out their own salvation— The mistake 
of reformers— Tariff-reform— The same mistake with currency reform must be 
avoided— Insist on principles, not on details— Objectors— Their disinterested- 
ness — Some interesting questions — The millionaire — The woman of fashion — 
The Solon— Financiers— The opposition— Interest-taking before the tribunal of 
Intelligence. 

CHAPTER XXXV 250 

A Vision — A promised land— The armies of toil— The attendant specter— Two 
goals — The giants of the furnace — The pale-faced, cunning man — The specter 
of want and the specter of sham— Why?— The solution— "Toil or perish"— The 
crisis — A transformation — The end. 



PREFACE. 

I give this book to the public in the hope that it may 
aid in bringing about a re-examination, in the light of 
modern intelligence, of one of the principles lying at 
the foundation of our industrial and social organiza- 
tion. If the effort shall have any influence in bringing 
about such a consummation, its mission will be accom- 
plished. The foundation must be secure if the fabric 
is to stand, and I believe that finance and industry now 
rest on an insecure foundation. The line of argument 
pursued in this work has never, to my knowledge, been 
presented by any other person. The reason of the wrong 
has never before been fully explained. If I am mis- 
taken, he who points out the error will confer a favor 
on me and thousands of other seekers after truth. But 
we want reason and not dogma. 

The practical application of the truth here presented 
would be so far-reaching in its effect as to be revolu- 
tionary. But it would be a peaceful and beneficent 
revolution, doing wrong to no one, and bringing justice 
to oppressed millions. 

In the work here presented I have endeavored to call 
things by their right names. No social wrongs are im- 
personal, and in denouncing or merely pointing out a 
wrong those who gain by such wrong must expect to 
receive some of the censure. I criticise classes for what 
they do, not for what they are. If the average day 
laborer who tries to keep body and soul together on a 
dollar per day should change places with the man who 

11 



12 PREFACE 

makes a million a year, that laborer would be just as 
grasping and unscrupulous in money-getting as he. The 
wealthy are not villains, nor the poor oppressed saints. 
But that is no reason why the wrong practiced by one 
class upon the other should not be condemned. We are 
all as good as we know how to be. I do not believe that 
any being is perversely or malignantly bad. The trouble 
is, we are too ignorant to recognize the right and do 
it. I think that the words of the "Melancholy Dane" 
should be changed into "blundering fools all." Igno- 
rance is the root of all evil ; perfect knowledge is per- 
fect morality. 

Then it is necessary to look all questions square in the 
face and try to learn the truth about them. I hope 
that I have done this; it is what I have attempted. 

The key to the interest question, the topic which I 
discuss, is the currency of the nation. For that reason 
I have added a discussion of the currency question and 
set out a plan for a scientific currency. It is practical 
and suited to the times. To all liberal-minded per- 
sons, it is worthy of most careful consideration. The 
idea of using wealth in the process of exchange as the 
basis of a currency system is old. Holland did it suc- 
cessfully. The means of applying that principle are 
my own. I offer the work to an earnest, truth-seeking 
public,in the hope that it will further the cause of jus- 
tice and truth. Examine it. It will repay the trouble. 

J. W. B. 



A BREED OF BARREN METAL. 

CHAPTER I. 

Introduction. — The importance of studies in sociology— Man a social animal— 
The correct method — Social and economic, compared to physical science — 
Natural law the foundation of both — All science speculative — Happiness the 
object of existence — Happiness development — Must be general— Ideal state is 
happiness to all — In sociology as well as art and science the ideal is the standard 
— The ideal is that which corresponds most closely with natural, law— Natural 
law must be obeyed — The first business of social and economic science is to find 
underlying natural principles — Ethics the foundation of these sciences — Present 
practices and institutions to be tested by ethical axioms — Unsatisfactory results 
to be explained by economics — Knowledge for the use of man. 

The most important chapter in the book of nature is man. 

There must be an excuse for all things. My friend 
the artist tells me why he painted this picture and not 
that. My scientific acquaintance has the best of rea- 
sons for following his particular line of investigation. 
My clerical friend can give a reason for every sermon, 
and I feel that I must give a reason for this book. I 
find it in the condition of fellow men about me. The 
lot of the average human seems a strangely unhappy 
one. Why? is an interesting and important study. 
This volume is intended to wrestle with that problem, 
from the material standpoint. It will try to discover 
the why of man's material discomfort. If that is dis- 
covered, the discovery will doubtless lead to a clearer 
understanding of the psychological questions which con- 
front us. From the tangible we will try to arrive at 
the intangible and to throw light on some of the all 
important questions which harass social man. It is 
because these problems are unsolved, that this book is 
undertaken, for I still believe, 

"The proper study of mankind is man." 

The epigram is as true to-day as when written by 

13 



14 A BREED OF BARREN METAL 

Pope or practiced by Byron or Shakespeare. The field 
is unlimited, the possibilities unbounded. The relations 
of man to man are less understood than any other 
branch of knowledge. A correct knowledge of what 
these should be is the ultimate end of all mental effort. 
The humblest worker in the field is engaged in the 
grandest of occupations. 

Man is essentially a social animal. All that he has, 
all that he is, comes from association with his fellow 
men. The most profitable study of man, then, is in his 
social relations. As we learn the physical laws of the 
universe by studying the relations of things, so we may 
learn the social laws of mankind by studying the rela- 
tions of man to man. If we would profit by the study 
of the physical universe, we must learn its correct laws, 
the great principles on which are builded the harmonies 
of nature. It is the study and determination of these 
that has enabled man to harness steam, to chain light- 
ning to his triumphal car, and count and measure and 
weigh untold worlds. It is by putting himself in har- 
mony with nature's laws that man has made all mate- 
rial advances. Just in the same way we must learn and 
put in practice, the great natural laws of harmony be- 
tween man and man. If we would make social and 
moral advances, we must put ourselves in harmony 
with the eternal laws of justice on which all stable so- 
cial and political institutions must be founded. 

Sociology and political science have more to do than 
to catalogue the facts of the rise and fall of prices un- 
der this or that condition, or to measure the influence 
of competition on this or that branch of business. 
There are great laws to be discovered in the social as 
in the physical world. We have still to formulate 
the gravitation and conservation laws of sociology, the 
foundation principles of social relations. Fortunately 
for us, Galileo, Kepler, Newton, Laplace and the thou- 
sands who have lived before and after them, thought 
that discovery was a part of the province of science. 
They did not content themselves with motiveless class- 
ifying of cold unrelated facts. Neither should the dev- 
otees of social science. They should try to lay a. 



A BREED OF BARREN METAL 15 

foundation of principles, and they must find these 
principles in nature. From that which is they should 
determine what should be. 

Happily or unhappily, man can for a time disobey 
moral law, provided he be content to pay the penalty, 
and what he does is no criterion of what he should do. 
He may fail through ignorance to take advantage of 
nature's social laws, as he has failed and still fails 
through ignorance to apply the physical laws of the 
universe. To dissipate this ignorance is the business 
of the sociologist of to-day. 

The foundations of sociology go to the very bed-rock 
of society; its problems are the problems of social and 
individual existence. If we can determine why we live 
and labor, and why we organize society, we have the 
principles for determining how we should live and labor 
and how we should organize society. 

Looking at the problems of human life by the dim 
light of man's flickering reason, we are led to conclude 
that happiness is man's aim and object here below. 
The pursuit may be conscious or unconscious, the goal 
may be sought in this world or the next, but ask whom 
you will, you will find that his energies are bent in the 
pursuit of happiness. All happiness is relative, not ab- 
solute. Experience teaches us that the greatest positive 
happiness lies in the fullest development of all of man's 
natural powers and capabilities and the fullest enjoy- 
ment of these developed powers. It is this and not 
freedom from trivial pain which men seek. Every indi- 
vidual among the myriads born to mother earth has a 
right to this free and untrammeled development and en- 
joyment of the powers which he possesses equal to that 
of any other of earth's children. There can be no real, 
just or lasting happiness unless every human being is 
included. Our reason revolts at the idea of some being 
born the puppets of others. In practice, both classes 
are unhappy. 

The ideal state of society is that state which secures 
all the greatest measure of happiness here below, and 
any state of society or any institutions, political or 
economic, which tend to develop a few at. the expense 



16 A BREED OF BARREN METAL 

of the many, are founded on wrong principles — princi- 
ples which contradict the natural underlying law of all 
human society. For society is organized to aid men in 
reaching the ends to which they all aspire. It is a 
means of securing happiness to man. 

While an ideal state of society is not easily attained, 
it is to the ideal in sociology as well as in every other 
branch of knowledge that we must look if we would 
perform anything worthy. It is the divine ideal in the 
sculptor's mind, carefully and painfully wrought out 
under his chisel, which gives the enduring beauty to 
the piece of rough, coarse stone. It is the sublime ideal 
in the poet's soul which, fashioned into words, thrills 
and ennobles and elevates the human heart. All art 
strives toward the ideal, all science toward the perfect, 
and it is only as they approach this goal that they 
produce anything of practical value. The deduction of 
law is the end and aim of all classification and obser- 
vation. If we would determine how far they are adapted 
to the ends for which they are intended, institutions must, 
then, be tried by ideal standards. We must not expect 
to find them perfect, but we must find them tending to 
perfection and not in the opposite direction; otherwise 
they are founded on false principles and certain to fall. 

The natural laws under which men live are superior 
to man. As part of the universe, man is governed by 
the laws of the universe. His laws must be in harmony 
with the laws of the universe. If they are they are 
aided and strengthened by natural law, if they are not 
they are annihilated and their supporters crushed. 
There seems little doubt that the laws of the universe 
are working for good, but whether for good or bad, 
they must be obeyed. In their overmastering might 
they are forcing us onward to some distant goal, to 
some great beyond, and if we do not wis'h to court 
annihilation we would do well to place ourselves 
in harmony with nature's onward march. We may then 
use our energies in enjoying our surroundings and de- 
veloping our powers, instead of wasting them in resist- 
ing the inevitable. The smallest natural law can no 
more be resisted with impunity than the mighty cur- 
rent of Niagara, 



A BREED OF BARREN METAL 17 

If, then, we are ruled by an overpowering force; if 
grooves are set and an invisible but inexorable power 
is driving us along these grooves, our first business is 
to locate these grooves and see that we keep on the 
track. In other words, we must discover the natural 
laws which rule us as a social body, and see that our 
social fabric is reared in harmony with these natural 
Jaws. We should find out what is, only for the purpose 
of knowing what should be. When a principle is once 
clearly established as a natural law, all other laws must 
bow to that principle. 

Ethics, the science of correct human relations, is the 
natural foundation stone of the whole social fabric, and 
I propose to test with the principles of ethics some of 
the principles applied in society. 

As the mathematician finally puts the test of axiom- 
atic truth to every principle of his science, and by that 
test determines whether that principle must stand or 
fall, so I propose to test with ethical axioms the insti- 
tutions as I find them, and thus determine their con- 
flict or harmony with natural law. 

The main problems of social science must be regarded 
as still unsolved. We know that results are unsatis- 
factory. We know that our most cherished institutions 
have failed to bring about the happiness which we all 
seek. The question for us to answer is, "Why?" Is our 
failure to accomplish our ends due to our ignoring nat- 
ural law? Are our misery and our injustice, our wrongs 
and our affliction, the penalties for violating nature's 
decrees; or are the laws of nature essentially vicious 
and capable of producing evil results only? These are 
the questions which political and social science is called 
upon to solve. 

I know that it is said that political economy is inter- 
ested only in things as they are, that the science is 
practical and not speculative. What is knowledge for, 
anyway, if not for the use of man? If man seeks hap- 
piness why should he not use his reason-acquired knowl- 
edge to attain it? Is not that most practical which 
points out to man his errors of the past and helps him to 
build better in future? Why should we codify errors 



18 A BREED OF BARREN METAL 

into laws and call the aggregation a science, while there 
are truths on which that science may rest? It does not 
make them the less errors that men have adopted and 
enthroned them. The history of the world is but a 
record of the errors and follies of mankind. Happy 
the nation without a history. Political science must 
learn a lesson from mathematical and physical science 
and, from failures and errors observed, learn truth and 
success. The history of sociology is no more the sci- 
ence of sociology than history of nations is the science 
of government. A catalogue of the principles used in 
trade may be useful in determining the principles of po- 
litical economy, but they are not the principles of po- 
litical economy. 



CHAPTER II. 

Disastrous Phenomena — Periodic panic — Distress of laborers — Paralysis of 
business — Borrowing by the government in times of peace and prosperity — 
These phenomena seemingly occult — Varied explanations contradictory and 
unsatisfactory — Periodic distress seemingly incident to our industrial organiza- 
tion — The optimist-conservative — His absurd empirical restrictions to the use 
of intelligence — The conservative a real anarchist as to all but police power — 
His inconsistency — His dogmatic stand — The mass of citizens think otherwise. 

Man is humanity's greatest enemy. 

In the world of industry there are disastrous phe- 
nomena which everybody has observed but which no one 
seems able to explain. These strangely occult mani- 
festations have just recently been more apparent than 
ever before. The freest and richest country on earth 
has just experienced a business depression the most 
severe in its history. Banks collapsed, commercial 
houses closed and factories ceased to operate. Railroad 
equipments lay idle in the yards, steamships plied 
empty. Thousands of men, after stalking the streets of 
their homes in the vain search for employment, organ- 
ized themselves into bands, overran the country and 
besieged the national capitol. Their cry was for bread, 
for themselves and their starving wives and children. 
The general government was compelled to coerce work- 
ingmen to yield to the demands of their employers. 
Police officers were, and still are, busy suppressing free 
speech and action lest it should lead to anarchy. He 
who expresses a new thought is tabooed as an enemy of 
society. The usual tax on the commmerce of- the coun- 
try is not sufficient to keep in motion the wheels of gov- 
ernment; and the nation, after thirty years -of unexam- 
pled peace and prosperity, is obliged to plunge further 
into debt for funds to carry on its ordinary functions. 
This is not a healthy picture. It must be a consequence 
of some principle at work in our institutions, yet no 
one seems to know what that principle is. 

19 



20 A BREED OF BARREN METAL 

The reasons given for the strange situation are as 
numerous as the sources from which they come. Ask 
the politician, and he will say, perhaps: - "The use of 
silver as a money metal is the cause of hard times.'"' 
The man at his elbow, who came from another section, 
will respond: "Not so; the threatened demonetization 
of silver is the element of mischief." "Good enough," 
says a third, "bat the main cause of distress is the tar- 
iff. " "I beg to differ, " breaks in another, "the fear 
that the tariff will be meddled with is ruining the busi- 
ness of the country." "Want of confidence, that is 
our trouble, " wisely remarks a philosopher. Confidence 
in what? But the meaningless platitude will not admit 
of specific statement. Another set of "thinkers" do 
not know; "such panics are necessary and their causes 
entirely occult." 

The United States experienced a like panic in 1873, 
and the causes to which it was attributed were quite as 
vague and varied. The panic of 1857 was as marked, 
its cause quiet as indefinite. The panic of 1837 was 
caused by Jackson and his trouble with the banks, or 
almost any other cause one might name. 

The panics of '48, '84, '64, '24, etc., were fully as in- 
explicable. 

We may search the financial histories of countries 
with industrial systems similar to our own, and we shall 
find that in all crises occur with more or less regular 
periodicity. England has had them for hundreds of 
years. 

There are those who see no menace in this periodic 
business prostration. They piously assert that it is nat- 
ural and necessary and it is useless to fight against it. 
Any move toward change is an absurd attempt to 
make the world over again ; any one who sees a wrong 
is a "calamity howler, " whatever that may be. Al- 
though man has developed the present luscious apple 
from the sour and meager crab; although he has devel- 
oped the ponderous draft horse and the lithe, supple 
racer from the little, long-haired, ungainly pony; al- 
though he has produced the massive Durham or Hereford 
from the little, nervous, long-horned ox of olden times, 



A BREED OF BARREN METAL 21 

he is powerless to use his reason to better his own con- 
ditions. The beautiful watch-dog, the truest friend of 
man, has been bred from the treacherous, prowling wolf, 
by man's intelligence. Steam has been harnessed to 
do man's bidding and, by means of it, industry has been 
revolutionized; gardens have been made of deserts and 
deserts of gardens; the whole face of nature has been 
transformed by man's intelligence; yet we are told that 
using that intelligence to regulate the relations of man 
to man is absurd and foolish. It is, in the language of 
those philosopher-dilettanti, "really quite ridiculous" 
for human beings to use intelligence in ameliorating 
social conditions. 

Such stuff as this would be considered too utterly 
nonsensical to require even a passing notice but for the 
fact that newspapers and periodicals of the highest 
standing lend their columns to the preaching of this" 
doctrine of infantile social impotence. 

Puerile aristocrats seem to forget that it is by human 
intelligence that all government has been established. 
If it were not for the use of more or less human intel- 
ligence in regulating the conditions of men, the phys- 
ically strong would still be masters of the rest of 
mankind, and nine-tenths of the human race would still 
be in a state of chattel slavery. If it were not for a 
modicum of intelligence exerted in fixing the relations 
of man to man, neither property nor personal rights 
would have any security whatever. Our institutions 
may, to some extent, be growths, but yet they are crys- 
tallized by human intelligence from the mother liquor 
of crudity and barbarism. 

The patrician apologist for a Chinese conservatism 
in treating things that are, would not be flattered to 
be called an anarchist, but he is more deserving of that 
title than the majority of persons to whom it is applied. 
He inveighs against the very foundation principles of 
government. If it is absurd and foolish to try to reg- 
ulate the relations of man to man, then all government 
is absurd and foolish, for government is but an attempt 
to regulate the relations of man to man. If it is prac- 
ticable to regulate these relations or even modify them 



22 A BREED OF BARREN METAL 

in one respect it is in all, and an attempt in one direc- 
tion is no more absurd than one in another direction. 
There is no generic difference in men associating them- 
selves together for the purpose of securing to each his 
life and property from the assaults of the armed bandit 
than in associating themselves together to resist the 
encroachments of the industrial bandit whose weapons 
are wealth and unscrupulous cunning. Yet one is lauded 
to the skies and the other is said to be absurd and 
foolish. We have a school of soi-disani philosophers 
who advocate anarchy in everything except the police 
power of government, and why they do not in that 
is not quite clear. Their physical courage is probably 
lacking. 

These same patricians and their apologists see no 
wrong in overgrown fortunes,no menace to liberty. The 
multi-millionaire is, they assert,an unmixed good with- 
out whom the poor would be infinitely worse off than 
now. They do not condescend to give reasons for such 
assertions, but state dogmatically that such is the fact. 
Great inequality in wealth is desirable as well as ad- 
vantageous. It is well that one man may be able, with- 
out the least inconvenience to himself, to smoke cigars 
and drink wine to the value of several dollars each day, 
although he renders no service whatsoever to anyone; 
while others, who toil unceasingly in the production of 
wealth, must be content to live and rear a family on a 
dollar or two per day. We might point out that this 
is contrary to the maxim of justice: "To every one ac- 
cording to his works." We might show by hundreds of 
instances that the man with millions is dangerous to 
popular government, because he may influence elections 
and legislation for selfish ends and pass laws contrary to 
the will of the people. We might show that the vastly 
wealthy may corrupt, degrade and oppress the citizen 
and subvert the institutions of a great nation. We 
might show that under the influence of enormously 
wealthy individuals property might be held more sacred 
than human life or liberty, and freedom might become 
a hollow mockery. We might show that neither hap- 
piness nor material prosperity can long survive the fall 



A BREED OF BARREN METAL 2H 

of individual liberty. We might show that the accu- 
mulation of large fortunes by the few al the expense of 

the many, has actually tended to produce the above 
results; but of course the plutocral or his apologist 
could see no wrong in all this, and the effort would be 
useless. He is not even moved by the extreme degra- 
dation of abject poverty nor the menace to civilization 
of poverty-bred barbarism, lie is too much wrapped 
up in selfishness to see or acknowledge anything; but 
fortunately for the country, there are not many so mor- 
ally and intellectually obtuse as he. 

The majority will not deny thatagrave problem con- 
fronts the nice, and that we are still far from its solu- 
tion. Most men differ only on the method of solution, 
or on the question of whether the problem be capable of 
solut ion at all. 

Never before in the history of the world have so many 
plans for the relief of humanity been brought forward 
as in the hist twenty years. This economist sees in 
profit-sharing the full measure of human felicity. The 
remedy of t hat one is the full control by the state of 
all objects of monopoly. One asserts thai tin' organi- 
zation of laborers is the panacea lor all social ills; an- 
other sees salvation in the education of the masses. 
Another believes in the single-tax, and another still in 
military socialism. 

The industrial conditions of the immediate past, if 
not of the present, are more than a problem. They are 
the symptoms of social disease calling for prompt and 
effectual relief. The most dangerous manifestation of 
this ailment is the unequal distribution of. wealth. 



CHAPTER III. 

The Distribution of Wealth — Distribution dependent on the elements enter- 
ing into the production of wealth— What these elements are — Land, the Laborer 
and Capital — Problem, to ascertain what portion of product goes to Landlord, 
Laborer and Capitalist — The term 'Laborer" defined — Wages denned. 

We may divert the stream, but cannot stop it. 

Men toil as long and arduously as ever and their toil 
is far more productive, yet those who toil become none 
the richer. The more wealth produced, the more idlers 
there are to use it and the greater the number of peo- 
ple clamoring for bread. The more productive the toil- 
er's work, the more extravagant become the lives of 
those who toil not. Ever is there found a way to di- 
vert this hard-earned wealth into the lap of luxurious 
ease. A woman who never produced a dollar's worth 
of wealth or anything else, will spend enough on one 
gown to keep half a dozen families of laborers for a 
year. Her husband or father or brother, or whoever 
she depends upon nominally, for support, if she does not 
levy her tribute directly, is as idle as herself. 

The young millionaire who never accomplished a task 
useful to anybody except himself, if, indeed, to himself, 
spends enough on one debauch to educate and start in 
business the son of a productive toiler. What is wasted 
by the wealthy,in excess of that which is required to give 
them a good livelihood and gratify legitimate pleasures, 
would probably feed the hungry, clothe the ragged and 
shelter the homeless of the land. It would at least 
furnish a means of giving work to the idle and making 
them self-supporting. Why is it not used for these 
purposes? Where does the wealth that is so lavishly 
squandered by the rich come from? 

It certainly does not make itself, as we shall see here- 
after. It is evidently a portion of what numerous la- 

24 



A BREED OF BARREN METAL 2o 

borers produce, and the families of these men have not 
at the same time enough to eat. We assert by our 
laws that these luxurious idlers have the right to revel 
in the laborers' wealth. 

Why, then, are the masses so poor? Evidently be- 
cause the classes are so rich. There is not wealth enough 
to go around when so much is wasted. Where, then, 
should intelligent beings look for the cause of poverty 
and distress? Manifestly in the artificial economic 
laws which derange distribution by allowing luxurious 
idlers to take a portion of the laborers' toil. 

If one-half the members of a family are spendthrifts, 
it is easy to determine why the industry of the other 
half will not thrive. Why does not the same rule ap- 
ply to the great national family? If there was a rule by 
which two brothers could take the bulk of the wealth 
produced by the industry of two others, and live in ease 
upon it while the two who toiled remained upon the 
borderland of want, all could easily see the injustice of 
the proceeding. But when the two parasitic brothers 
increase to hundreds of thousands, and the toilers to 
millions, we tacitly admit that the idlers of the family 
have a right to the wealth the toilers produce. That the 
wealth which they use is what the toilers produce, I 
hope to show hereafter, as well as to point out the 
method by which it is taken. Nobody who understands 
the situation will have the hardihood to say that such 
a proceeding is just either in the case of the four or the 
millions; and whatever the edict of popular prejudice 
and ignorance, aspiring teachers and philosophers 
should not hug vain delusions. Nearly all tacitly admit 
that the results of the distribution of wealth are not 
what they should be. Wealth is distributed according 
to fixed laws. There are certain rules as to what per- 
centage of the results of production shall go to the toil- 
ers, and to the possessors of accumulated wealth. If 
these rules were just, their results must be just. But 
the result of these rules appears, to the thinker at least, 
a monstrous injustice. The rules themselves must be 
unjust. We have, to say the least, ground for suspect- 
ing their injustice, The most important rules of dis- 



26 A BREED OF BARREJS METAL 

tribution are the laws of rent and interest. They are 
the basis of our economic system. They must be taken 
before the bar of justice. The condition of the super- 
structure demands it. The relations of the classes and 
the masses, as well as the state of business, loudly cry 
for a re-examination of the basic laws of our economic 
system. The laws of rent have been examined by a 
master whose work I shall not attempt to improve 
upon.* I shall refer to them only sufficiently to make 
other matters clear. I will examine the justice of in- 
terest-taking and its influence upon the distribution of 
wealth. 

Three elements enter into the production of wealth: 
land, the laborer and capital, for which are paid re- 
spectively rent, wages and interest, or capital profits. 
Kent goes to the landlord, capital profits or interest 
to the capitalist, and wages to the laborer. These three 
get practically all of the gross product of industry. If 
they receive their returns in just proportion, the ine- 
quality, the want, the misery of the earth are absolutely 
necessary and it is foolish and vain to rail against these 
conditions or ask for change. If the capitalist, laborer 
and landlord, each gets his just proportion of the wealth 
produced, the question is forever closed. We may plead 
with him who gets the greater share to divide it with 
his brothers, but we cannot ask him to do so on the 
ground of justice, much less ask the government to coerce 
him to do so. The problem, then, is to ascertain what 
proportion of the wealth produced goes to the toiler as 
such, the capitalist as such, and the landlord as such. 
It is necessary to ascertain what each claims and what 
each receives and what right he has to it. When that 
shall have been fully accomplished, with how and why, 
economic science will have completed its mission. 

I use the term "laborer" in its broadest sense, includ- 
ing in that category all who toil with either hand or 
brain to add to the gross assets of the human race; 
but I rigidly exclude all whose efforts of either hand or 
brain are directed to taking from others what others 

*While there are many of the details of the theory of Henry George which I 
cannot accept, I believe his main idea to be correct. I do not deem his remedy 
quite effective, 



A BREED OF BARREN METAL 27 

produce. I exclude all of those employed in transfer- 
ring the title of wealth from one to another without 
giving an equivalent for the wealth transferred ; rather 
than in wringing from nature something which will add 
to the wealth of all. He is not a productive toiler who 
abandons the ranks of those who combat with nature 
for sustenance and advancement, and skulks in the rear 
of the army employing his brain and muscle to appro- 
priate the spoils of the hard fought battle. 

Wages, or the remuneration of labor in the sensn in 
which I use it, would include wages of superintendence, 
wages of necessary financiering, wages of management; 
in fact, all remuneration for human services which are 
instrumental in adding to the sum total of the products 
of the people's industry. I use the terms broadly in 
this discussion, so that there may be no confusion aris- 
ing from the fact that the capitalist isoftenera laborer 
or a landlord also. What he receives as a toiler we 
will charge to the account of wages, what he receives 
as a capitalist to the account of interest or capital prof- 
its, and what he receives as landlord to the account of 
rent. 



CHAPTER IV. 

The Laborer— Is he overpaid?— What he receives— What it costs to live— Com- 
mon experience rather than made conditions — The census figures — Bread and 
soup economists — The pay of clerks— The remuneration of laborers — Farmers 
-The remuneration of sweaters and shop girls — The social evil and its rela- 
tion to wages — A reform work for women — The army of unemployed — The con- 
clusion that the remuneration of the laborer is not too great— If he is entitled 
to more, he needs it — The only means by which higher wages may be paid. 

" What thou wouldst highly, that wouldst thou holily, 
Wouldst not play false, and yet woiddst wrongly win." 

Leaving for the present the question as to whether 
the toiler has a right to greater remuneration for his 
labor, let us inquire whether the remuneration which 
he does actually receive is too little or too much; 
whether it is desirable that he should receive more. 

An examination of the average wages of toilers will 
convince one that those who do the work of the country 
are, at least, not overpaid. The census of 1890 gives 
about $445 per annum as the average wages of persons 
engaged as employes in the manufacturing industries. 
Experience teaches all of us that this estimate is very 
large. Anyone who takes an interest in the subject can 
in any city find thousands of laborers working for less 
than a dollar per day, and wages over one and one-half 
dollars per day are the exception in occupations re- 
quiring little skill. But taking even the census figures 
as correct, the average given includes the wages of 
skilled, high-priced mechanics and foremen; hence some 
of the laborers must necessarily work for much less 
wages than the average given by the census compilers. 

No one who has lived in a city of over fifty thousand 
inhabitants, the places where the bulk of our manufac- 
turing interests are located, will assert that a family 
can be fed, clothed and educated as the citizens of a 
free nation should be, for four hundred and forty-five 

28 



A BKEED OF BARREN METAL 29 

dollars per annum. Rent itself, or rent and street rail- 
way charges, will reduce the sum to three hundred dol- 
lars. Even at this figure the family must live in the 
cheapest and humblest of dwellings. 

Seventy-five dollars per annum is the least possible 
amount on which a family of four can be clothed. This 
would leave but seventy-five cents per day for food, fuel 
and incidental expenses, such as medicine and doctor's 
bills. Whatever the apostles of soup-bones and neck- 
steak may figure out as the cost of living, any one who 
has tried to live decently in a city on less than six hun- 
dred per year, has found himself confronted by a most 
difficult problem. The very fact that the greater num- 
ber of bread and soup economists spend twenty times as 
much on their own families as the amount which they 
say is enough for the family of the laborer, would brand 
their estimates as totally worthless. Then if four hun- 
dred and forty-five dollars per annum is an inadequate 
remuneration, one on which the toiler can scarcely ex- 
ist, much less provide for the contingencies of the fu- 
ture, how do those live who get but one dollar or less 
per day and that for a part of the year only? This is 
the condition of the common laborer. I am sure he is 
not overpaid. If he has a right to more he has use for 
it. 

The census estimates of the wages of officers and 
clerks of manufacturing corporations are quite worth- 
less. At least the average wages of this class gives no 
idea of the wages of the extremes. The average wages 
are given at about eight-hundred and thirty dollars per 
person per year, yet as this result averages together 
thirtv-dollar-per-month clerks and fifty-thousand-per- 
year corporation officers, it gives no idea of what are 
the wages of the greater number. Our experience has 
taught us that the average wages of the clerk is much 
below the figures given and the average wages of the 
officers or firm member almost infinitely above it. The 
average clerk in our cities has a good deal of trouble 
to make ends meet, while some corporation officers 
are much overpaid. This'is especially true of railway 
and bank officials in some localities, while in others 



30 A BREED OF BARREN METAL 

the incomes of these men come from interest and capi- 
tal profits almost exclusively. Indeed where a corpo- 
ration officer is paid over five thousand per year, his 
wages represent capital profits rather than services, 
for five thousand dollars per year will secure the best- 
energy and mind of the country. But more of this 
hereafter. 

There is no way to get at the exact wages of the farm 
laborer, but it is undoubtedly ridiculously small. About 
forty-three and one-half millions of persons live in the 
country, and nearly all depend for livings directly or 
indirectly on the products of the farm.* This product 
is but $2,460,000,000 per year. It pays charges other 
than wages, of at least half a billion. Now divide the 
remainder among the nine, million or so of toilers who 
live in the country, and each is given the magnificent 
sum of $216 to live upon for a year and support the 
three or four others dependent upon him. If we include 
services in the estimate but about one-sixth of the 
wealth produced is produced on the farm and two-thirds 
of the population tries to live upon it: 

Anyone who within the last few years has seen life 
on the farm, with its unending, lonely, dismal round 
of drudgery from "sun to sun," with its pinching and 
shaving to make ends meet, while the mortgage ever 
gets a firmer grip (unless he be an Atkinson), needs no 
long drawn out argument to convince him that the toil- 
er on the farm gets none too much for his labor. The 
honest observer cannot deny that the small farmer and 
the farm -la borer are being pushed by the grim might 
of poverty close to the danger line which separates the 
sturdy yeoman citizen from the ignorant, squalid peas- 
ant of the old world. If those who are inveighing 

*In Census Bulletin 99 the following table of gainful occupations is given: 

(1) Agriculture, fisheries and mining 9,013,201 

(2) Professional service 944,323 

(3) Domestic and personal service 4,360,506 

(4) Trade and transportation 3,325,962 

(5) Manufacturing and mechanical industries . 5,091,699 

Total 22,735,661 

Portions of the second and third classes are dependent on agricultural product 
for a living, swelling the workers to be paid from agricultural returns a little 
short of ten millions, and making the whole population dependent thereon 
nearly up to the Census figure for country residents. 



A BREED OF BARKEN METAL 31 

against foreign pauper labor would use soma of their 
energies to save the American laborer from the same 
fate, they would be working more to the purpose. 

We have thus far been speaking of the relatively pros- 
perous laborer. We have not taken into account the 
sweater whose pittance is so inconsiderable that it is 
amazing that any one can live upon it. Then we have the 
underpaid factory girl, and the shop girl who, scarcely 
earning enough to keep body and soul together, is 
obliged very often to resort to other means to accom- 
plish that end. When a girl is asked to work in the 
shops of our big cities at from three to six dollars per 
week, and is told by her employer or his agents how 
she may pleasantly supplement this pittance, it is not 
difficult to see why there is a social evil of ponderous 
proportions. Compelled to dress well to hold her po- 
sition, unless she be fortunate enough to live with par- 
ents, she has the alternative of want or dishonor. Oh, 
ye luxurious, complacent matrons who wine and dine 
and sit on velvet cushions on Sundays, and listen to 
metaphysical discourses which aim at nearly nothing, 
are not you ashamed that your ease and complacency 
is often earned at the expense of the soul of your poor 
sisters, who if given but their just share of what you 
squander would be as honorable as you? Ye woman 
suffragists and W. C. T. U. 'a, there is missionary work 
for you in your own churches among your own hus- 
bands, brothers and sisters. Teach the women who lead 
the society of our great, cold, extravagant cities to spurn 
the luxury which is wrung from the want of poor toil- 
ing fellow-women, teach them to honor men who would 
rather be just than to lie or cheat or oppress to gratify 
the vanity of the woman he loves, and you will have 
done more for humanity than you can do by a century 
of preaching virtue and practicing and applauding 
wrong and oppression. Men have done more wrong to 
gratify feminine vanity than from all other motives 
combined. One of the greatest wrongs of to-day is the 
starvation wages of the shop-girl. 

All this in passing. It is evident that even those who 



32 A BREED OF BARREN METAL 

are not in need of work are underpaid for what they do. 
But this is not all. 

It goes without saying that the industry of the na- 
tion should be sufficiently productive to support all of 
its inhabitants with reasonable comfort. Yet we have 
more than a million of laborers willing to work who 
are obliged to subsist on a pittance doled out by char- 
ity. Even of those who do work during their days of 
strength and vigor, one out of ten goes to a pauper's 
grave and two of the remaining nine are saved from the 
potter's field through the munificence of friends. At 
the wages received, it is utterly impossible for the com- 
mon laborer to provide for his declining years. 

From whatever standpoint we view it, we must de- 
cide that the remuneration of the laborer is too small 
rather than too great. This is the fact noted by all im- 
partial observers. Every statesman preaches and every 
reformer asserts that higher wages are desirable. 

Methods by which higher wages may be paid are as 
much sought as was ever the philosopher's si one.* Pro- 
tectionists and free traders, gold men, silver men and 
greenbackers, populists, trust advocates, and million- 
aires, all avow that what they do is to bring about 
higher wages. But higher wages can come only by 
trenching on the remuneration of the landlord or the 
capitalist or both, for they get all the product which 
does not go to the laborer. With the same amount of 
capital employed and the same amount of land and the 
same amount of labor and skill, other circumstances be- 
ing equal, the product is constant. Theonl} T way to give 
more to one of the three classes among whom that pro- 
duct is divided, is to give less to one or both of the other 
classes. The important question to be solved is, has 
the laborer a right to more of the product and the land- 
lord and capitalist to less? 

*It is strange to see on one side of a newspaper a long article showing that 
$15,000 per year was not an extravagant allowance for a child not yet in its teens, 
and on the next page one showing that laborers are well paid at a dollar or so 
per day and that they have really nothing to complain of. 



CHAPTER V. 

The Margin of Profits— Some figures on the actual shares of the products of 
industry received by *he several classes— Mr. Atkinson's cotton mill— The 
share of the laborer — The remainder goes to keep up wealth and remunerate 
the capitalist and landlord— Ten to fifteen per cent upon capital employed, 
the probable margin of profits— This includes interest and rent— It applies to 
successful enterprises only--Census figures— Their indetiniteness— The margin 
small— To whom shall it go? the vital question. 

"Our sins return to plague us." 

It is extremely difficult to give precise figures as to 
the actual distribution of the gross products of the na- 
tion's industry, but from census figures and other 
sources this may be approximated. According to Mr. 
Atkinson's real or imaginary cotton mill, the laborers 
in a single process of production get 28 per cent of the 
gross product. This includes clerk hire and the labor 
of transportation. In the production of raw materials 
the laborer gets a somewhat larger share of the gross 
product, so that following an article through the succes- 
sive stages of production from the time the raw materi- 
als are taken from mother earth to the time the product 
is given into the hands of the consumer, the laborer 
gets something more than fifty per cent of the total gross 
product. The rest of the product is absorbed by the 
landlord and capitalist and used in offsetting the nat- 
ural deterioration and loss to which wealth is subject. 
A portion of the product received by the laborer is used 
in the payment of taxes, as is also a portion of that 
which falls to the share of the landlord and capitalist. 
Atkinson figures out that there is but six per cent 
left to the capitalist, or sixty thousand dollars on a' 
capital investment of a million, after all other charges 
are paid, and this, too, where business is done on a very 
large and economic scale. A portion of this is capital 
profit or interest and a portion land rent. This is net, 

33 



34 



A BREED OF BARREN METAL 



while the gross return to the laborer is given. If we 
first allow for charges for keeping up capital and insur- 
ing against loss, we should allow the laborer enough to 
keep up his strength and produce his kind as well as 
insure his life before we reckoned his wages. But even 
as a net profit this is on an average too small for the 
returns of successful business enterprises. The business 
man counts on his. capital paying interest at about six 
per cent, as well as profits or dividends of about the 
same amount, which would make the net return to the 
capitalist and landlord about twelve per cent of the 
gross product of industry. 

According to the figures of the census for 1890, but 
about ten per cent of the gross product was retained 
by the capitalist as profits and interest, making the 
return for the capital invested about fourteen per cent, 
This is not exact, as capitalist and landlord profits en- 
ter to some extent into the item of miscellaneous ex- 
penses as well as that of salaries of officers and members 
of firms. 

Then, in the census estimates, no allowance is made 
for .the charge for deterioration of capital, which would 
amount to two and one-half or three per cent of the 
gross product.* 

All this goes to show that the margin of profits is not 
large, and the vital question is, to whom do these profits 
belong? If they should go to increase the wages of the 
laborer, they would be found sufficient to give employ- 
ment to the involuntarily idle and save those who do 
work from the pinch of poverty. If they rightly go to 
the support of the idle rich there is no cure for poverty 
and want. Of course with more productive workers", 
more would be produced. 

•™ In , ^ e sumi ? ar y prefacing extra Census Bulletin No. 67 we have the follow- 
ing statement of expenses of manufacturing: Miscellaneous expenses, $630,944,- 
MQiQif^^'!!' 282 ' 823 ; 265 ' totaI wa 8 es officers, firm members and clerks, 
5fi« «1 ' ^L 1 1 .° th er employes, total wages, $1,890,908,747; cost of material, $5,158- 
eoB.dM. ine total value of products is given at $9,370,107,724. 



CHAPTER VI. 

The Landlord— His right to remuneration— Land defined— Ricardo's definition 
— The significance in which it is here us ed— Mines not land in the sane sense 
as farming land or building sites — Forests not land, unless cultivated— The 
natural basis of property— \Vh, it one pro In ces is primarily his own— What he 
does not produce or what another produces is not primarily his own — Land 
not produced by individuals — Does not belong to individuals — Belongs to the 
community in usufruct only — Community can give no greater title than it 
possesses — The collection of rent does not aid productivity— No return given 
by landlords for rent taken— An imposition— Royalties in the same category- 
Landlords and royalty-takers levy a billion of dollars or more per yen on in- 
dustry — They take that much of the annual product— It does not justly belong 
to them, must therefore belong to laborer or capitalist or both. 

11 What are we otherwise here than guests?" 

What right has the landlord, then, to remuneration? 

Land, in the broader signification of the term, is the 
free gift of nature to all her children. It is the coal 
in the mine, the lead, iron, gold and silver in the ore, 
the standing forest, the fish in the stream, the water 
to run our mill-wheels and float our fleets, the firm 
earth on which to build, the air, the imperishable qual- 
ities of the soil. By Ricardo the term land is limited 
to the imperishable qualities of the soil, and this in- 
terpreted to include streams and water powers is the 
significance in which I shall use the term. It is for land 
thus limited, or rather the values attaching thereto, 
that rent proper is charged. Ore, coal, timber, fish, 
etc., in their original places, or the mines containing 
them, while supplied by nature are not land in the sense 
that fields and building sites and roads and navigable 
rivers are land. They are perishable, limited in quan- 
tity, and are consumed by use. The compensation 
charged for them is not rent proper, and does not follow 
the laws of rent. To secure the value of the products of 
mine and forest to the whole community, will require 
very different remedies from those required for imper- 
ishable land. 

Land is the undiminishing contribution of nature to 
the needs of man. It is given value by the multitudi- 
nous improvements and adaptations civilization devel- 

35 



36 A BREED OF BARREN METAL 

oped upon it by the heads and hands of toil, taken in 
connection with the fact that it is limited in quantity, 
requisite as a basis for all production, and attaches to 
itself the utilities of a portion of the improvements 
upon its surface. Mines and forests are natural store- 
houses not spontaneously replenished by nature; land, 
what is left after the store has been taken. 

It will be readily admitted that what one produces is 
primarily his own. This is a necessary corollary to the 
equal rights of all to life, a right, which is affirmed by 
the practice of all civilized communities. It follows, 
necessarily, that what one does not produce is not pri- 
marily his own. These propositions are the basis of all 
property. If one can not gain a property right by pro- 
duction, there is no way in wlych he can gain such a 
right. And everything which man uses, except what 
nature freely gives, is produced by man. One can gain 
title to what he has not produced by a free gift from 
the producer, or by trading directly or indirectly what 
one has produced for it. A title to what one has not 
produced can come only through him who has produced 
it. Applying this axiomatic principle, the landlord has 
no just title to land, no greater right to it than any 
other citizen. He did not produce it, for by definition, 
it is the free gift of nature. He did not gain title to it 
from him who produced it, for no human being produced 
the land, and nowhere is it written in the record of na- 
ture that any individual shall have exclusive title deeds 
to that which is the common inheritance of all. Even 
the community can give no greater title to land than 
they themselves hold, and this is but usufruct for the 
passing generation only; and then only on such terms 
that the thousands born daily into the world shall share 
the gift of nature as well as those already here. For 
these new-comers have an equal right to live with those 
here before them, and none can live except by utilizing 
nature's gifts. Nature has no laws of primogeniture. 
Her bequests are to all the generations of men. 

As the landlord has no just exclusive right to the 
land, he has no right to charge others for the use of it, 
and no right to withhold it from the use of others. He 



A BREED OF BARREN IV^ETAL 37 

may have a right in usufruct while he lives, just as has 
every other individual, but this is only to what he can 
personally use to ordinarily good advantage. What he 
does personally use must be the criterion of what he can 
use. Rent belongs to the community as a whole. For 
upon the improvements built up by the community as 
a whole the rental value of land depends.* 

The fact that the landlord's collection of rent, or the 
owner's natural advantage, his royalty, makes the farm 
no more productive, puts no more gold or iron in the 
ore, no more coal in the mine, makes the site no better 
to build on, the river no more navigable, the water no 
richer in fish, the forest no more extensive, the stream 
no more powerful, stamps the rent and royalty charge 
as a tribute levied without any return. These charges 
are founded solely on cunning dishonesty and force. 
They have not the shadow of an ethical sanction. Rent- 
taking by landlords, then, is not only grossly unjust, but 
is in no way necessary to production. It is a charge on 
production for which there is absolutely no return. It 
can then be well dispensed with. By all the canons 
of business, when one is making retrenchments the first 
expenses to attack are those which are unnecessary. 
But these are worse. They are absolutely inimical to 
the best results in production. Land is the basis of all 
production, and the practice of allowing the landlord 
to collect rent on land has led to a monopolization of 
the earth which deprives vast numbers of willing pro- 
ducers of an indispensable instrument of industry. 

What is true of the landlord in this respect is true of 
the exacter of royalties also. Besides giving absolutely 
no return, he discourages and cripples industry. 

According to a bulletin of the census of 1890 the real 
estate of the country, lands and improvements, was 
worth in that year thirty-nine and one-half billions in 
round numbers This would place the value of bare 
land at something less than twenty billions. Rents are 
not more than five per cent of this sum, giving a yearly 
aggregate of one billion paid to the landlords of the 

*That this proposition does not express the whole truth will he shown In reafter. 



38 A BREED OF BARREN METAL 

country. Profits on land held speculatively must be 
added to this, swelling the aggregate very materially. 

It is impossible accurately to estimate royalties from 
forests and mines, but they aggregate hundreds of mil- 
lions. 

We have then considerably more than a billion dol- 
lars per year exacted from industry without a shadow 
of right or a pretense of valuable return.- Neither the 
landlord nor the appropriator of others of nature's 
gifts has any claim to it in justice. It must belong- 
to either the capitalist or the laborer. Let us inquire 
which of these classes have the better right to the money 
now paid in rent and royalties. In doing this we will 
also put the test of ethics to the share which now goes 
to the capitalist. 

The single tax proposed by Heniy George and his 
followers, if capable of application, would greatly miti- 
gate, if it would not destroy the evil of private appro- 
priation of rents. It is probable that nothing short of 
state ownership of mines and close state control of for- 
ests can ever give royalties to the community, the only 
just owner. It looks to me as though a tax on mining 
land would scarcely meet the requirement, for the tax 
must be levied in accordance with the output, especially 
if it were intended to take the whole royalty charge,and 
then it would become a tax on the product capable of be- 
ing readily shifted upon the consumer. But more of 
this hereafter. In fact, there is no such thing, economic-, 
ally speaking, as mining land. We have no soil capable 
of reproducing minerals, even by the application of any 
amount of labor. 



CHAPTER VII. 

Terms — The necessity for an exact use of words — Wealth, capitalist and laborer 
defined — Interest and capital — Profits — No necessity for distinguishing between 
them in this inquiry — Arguments based on an ambiguous use of terms — Capital 
held to be labor —The use of terms in their ordinary signification not so neces- 
sary as their use in the same signification in the same discourse — Is capital 
stored labor? — The fallacies based on this erroneous conclusion — A jugglery of 
terms — Neither capital nor labor has rights — Rights belong to persons, not 
things— The basis of the capitalist's claim for remuneration — The basis of the 
laborer's claim. 

Ambiguity is the stumbling-block of logic. 

At this point it is necessary that terms be clearly de- 
fined, for from the use of ambiguous terms arises nine- 
tenths of the ordinary confusion of thought. Capital 
is wealth used in production. Wealth is anything hav- 
ing value in exchange; i. e., capable of commanding a 
price. Buildings, all improvements on land and all 
movables are included in the term "wealth." The capi- 
talist is he who controls wealth, and from that fact, 
apart from any individual services, claims a remunera- 
tion for allowing his wealth to be used. This remunera- 
tion is called interest or capital profits, depending on 
whether the wealth is loaned to another or managed by 
another under the direct control of the owner. In this 
inquiry it is unnecessary to distinguish between interest 
and capital-profits, for both are returns for the use of 
wealth, and not for the individual services of the cap- 
italist. It is the capitalist, and not capital, who receives 
these returns; and it is the laborer, and not labor, who 
produces wealth and receives wages. We are inquiring 
into the rights of the laborer and the capitalist as such, 
and not into the rights of labor and capital, for the lat- 
ter terms represent things without any rights whatever. 
I here use the term laborer in the sense in which I have 
used it before in these pages; he who uses his brain or 
hand in adding to the sum total of human assets, ex- 
cluding him who uses his powers to appropriate what has 
already been produced. 

39 



40 A BREED OF BARREN METAL 

These distinctions may appear pedantic, but they are 
absolutely necessary to meet a school of apologists who 
are either so mentally confused or so sophistical, that 
they readily accept conclusions based on using terms in 
different meanings in different portions of a discourse. 
Some of them go so far as to claim a remuneration for 
capital on the ground that it is labor. 

It matters not so much whether terms are used strictly 
in their ordinary meaning, if the same meaning is at- 
tached to them in all portions of the same discussion. 
To show the vital necessity for a precise use of terms, I 
will notice briefly certain arguments based on an ambi- 
guity of words and thus clear the way for subsequent 
discussion. 

Capital is stored labor, say the apologists, and from 
this premise they go on to argue that since it is stored 
labor and was produced by. labor, it has the rights of the 
laborer. There are several fallacies buried in this nebu- 
lous maze of hazy cogitation. 

It does not follow that because a thing was produced 
by labor it is labor. In fact, that is the best argument 
that it is not. A force and the result of a force are 
quite different concepts. You may as well say that a 
spade is a man's ingenuity because a man's ingenuity 
produced it, as to assert that the result of labor is labor 
because it is the result of labor. The wealth resulting 
from labor, or the stored labor, as it is termed, can no 
more produce what labor can, than the spade can pro- 
duce another spade. The reason in both cases is iden- 
tical. The spade, though produced by man's ingenuity, 
is not man's ingenuity; and wealth, although the result 
of labor, is not labor. Wealth and labor have no more 
in common than a man's ingenuity and a spade. Wealth 
is an inanimate, decaying thing, labor a living force. 

The confounding of cause and effect which pronounces 
wealth used as capital essentially the same as labor, is 
so utterly absurd that it would not be worthy of notice 
were it not for the fact that acute thinkers in other 
fields cling to this fallacy. 

But these apologists go a step further in their argu- 
ment. They say that the result of labor is labor, but 



A BREED OF BARREN METAL 41 

the result of labor is also capital. Capital is therefore 
labor and hence has the rights of labor. Labor produces 
all wealth, hence the labor which is the result of labor, 
and is at the same time capital, is entitled to the share 
which it produces. Thus playing on different meanings 
of the terms labor and capital, and using these rigidly 
distinct concepts as interchangeable, these muddle- 
brained philosophers prove to their own satisfaction 
that capital is productive, and hence entitled to a por- 
tion of that which is produced by the laborer. 

This is exactly the same sort of logic by which the 
tyro in that science conclusively proves that a cat has 
ten tails or that one cent is better than heaven. It is 
labeled by logicians, the fallacy of ambiguous middle. 

It is scarcely necessary to point out to the man of 
common sense that what the laborer produces is not 
labor, no more than the spade is a man's ingenuity, or 
the bedstead which he produces is the cabinet maker. 
If you apply the term labor to these results of the toil 
of the laborer, you mean something altogether differ- 
ent from what you mean by the term labor used in the 
sense of the productive activity exerted by the laborer. 
What is true of the latter is not in any sense true of the 
former. If you change the term to stored labor and 
then to capital and then substitute the latter term for 
labor where it occurs, you are simply juggling with 
terms, and the results obtained mean absolutely noth- 
ing. Your action would be the same as though you 
solved a problem in mathematics by letting "X" rep- 
resent thirty in one portion of the process and one 
thousand in another and substituting these different 
'.'X's" for each other — as though they were the same.* 

If these philosophers had not made this mistake in 
the indiscriminate use of labor and capital, there would 
be another fatal difficulty with their argument. How- 
ever, much the same fallacy would be involved. Neither 
capital nor labor has any rights whatever. They are 
simple things, with no more rights than a doorpost or 
a front fence. This is especially true of capital, which 

*There can certainly be no fault found with using words figuratively in dis- 
course, but it is an unpardonable fallacy to argue from both real and figurative 
meanings in the same discourse. 



42 A BREED OF BARREN METAL 

is nothing more than wealth intended for a certain pur- 
pose. Labor is a thing when used as a general term, 
but cannot be separated from the laborer. The rights 
belong to the laborer and the capitalist, and this brings 
us again to the original proposition lying at the foun- 
dation of all property rights. Man has a primary right 
to what he produces, and hence has not a primary right 
to what any one else produces. 

The capitalist bases his claim to what is produced on 
the claim that his wealth produced it. The laborer 
bases his claim to what is produced on the ground that 
his labor produced it. This must necessarily be the 
basis of the claim of each, otherwise our first proposi- 
tion would be wrong. 

The capitalist, as such, certainly does not directly aid 
in the production of anything; for as a capitalist he toils 
not in production. As he has no title to what the la- 
borer produces and can acquire none through his wealth, 
he has, as a capitalist, no title to anything produced, 
unless his wealth is capable of producing it. The whole 
question of the right of the capitalist as such to interest 
or capital profits, to any form of remuneration what- 
ever, for allowing his wealth to be used, depends on 
whether wealth is of itself productive. It is a question 
of fact, purely, capable of being established by evidence. 
Let us put human experience on the stand and ascer- 
tain the truth. 

The idea that the mere possession of wealth, regard- 
less of whether that wealth be capable of production, 
gives a right to a portion of the product of industry 
is an obvious absurdity. The capitalist has not as a 
man a right to what the laborer produces. If he has 
any greater rights as a capitalist than as a man he must 
have gotten those rights from his wealth, for the pos- 
session of wealth is the only difference between the 
capitalist, as a capitalist, and the capitalist as a man. 
If he got from wealth the right to appropriate to his 
own use the wealth produced by the laborer, the wealth 
of the capitalist must have had that right. This would 
be asserting that wealth, an inanimate thing, had 
greater rights than either the capitalist or the laborer, 



A BREED OF BARREN METAL 48 

which is manifestly absurd. Unless wealth is essentially 
productive, the capitalist, as a capitalist, has no right 
to any remuneration whatever. Is wealth essentially 
productive? 



CHAPTER VIII. 

Is Wealth Essentially Productive — The observed essential principle of 
decay in all wealth — Specific instances — The pyramids — Rome — A dynasty of 
kings — Articles of common use — The life of a machine — Without the exertion 
of the laborer the country would turn into a wilderness — What we eat and drink 
and wear — We live from hand to mouth — The independence of the capitalist — 
Labor alone the preserver of wealth — No exception to the rule of decay in 
wealth — Interest-taking must be founded on the assumption of the spontaneous 
growth of wealth— The absurdity of the assumption. 

"The proudest work of man as certainly, but sloiver, 
Must pass like the grass 'neath the sharp scythe of the 
mower." 

Is wealth essentially productive? 

Every article of wealth produced by man has within 
it the essential principle of decay and final complete 
destruction. Nature lends it to him but for a time; 
after a time she reclaims it as her own. The condition 
of the loan is constant use. Man must produce unceas- 
ingly to keep his stock of wealth intact. There are no 
exceptions to the rule. The more indispensable an arti- 
cle to humanity, the more prompt and certain its decay. 

The most stable of man's works are the least useful. 
The vast pyramids of Egypt, useless monuments to the 
superstition and misguided ingenuity of a race of slaves, 
seem, at first glance, eternal; but, although their exist- 
ence has covered but a point in the existence of short- 
lived man, the hand of time is already grinding them 
to the dust. Eternal Rome is in ruins; the palaces of 
the Caesars have crumbled to decay. More terrible 
than the Goths and Vandals has been the edict of Na- 
ture reclaiming her own from the evanescent imprint 
of the feeble hand of man. Palmyra and Thebes are 
but half forgotten names; Babylon, but a symbol of 
iniquity. Scarcely less perishable than man himself 
are the works of his hands. Remove the preserving 

44 



A BREED OF BARREN METAL 45 

care of the laborer from man-made wealth, and its de- 
struction io but a question of days. 

So true is this that we might conceive of a great 
dynasty of kings owning the earth and all of its bright 
cities and all of its teeming wealth; yet, if no toiler's 
hand were raised to save, the scions of that dynasty 
would starve as they watched their fair cities crumble, 
and the earth become a wilderness. Even after a quarter 
of a century, there would not be a king left to tell the 
tale. 

If we turn our attention to articles of common use, 
we find them more perishable still. The staunchest 
ship will scarcely brave the storms of half a century. 
Place her idle and unattended in the docks and she will 
rot in a decade. The locomotive with its frame of steel 
and its coat of imperishable brass, if active, will scarcely 
outlive the youth of the hand that fashioned it; idle- 
ness will not extend its career. The average useful life 
of a machine is estimated at twenty-two years, and the 
rust of idleness will destroy it more quickly than the 
wear of work. What would become of our electric sys- 
tems, the metallic nerves of mother earth, if abandoned 
to the destructive powers of nature for even ten years? 
We could scarcely determine that they had ever been. 
If abandoned for a quarter of a century, the continent 
would turn into a wilderness scarcely less desolate than 
when Columbus landed here. Our roads and streets and 
wharfs and shops, if left to themselves, would scarcely 
survive the hands that built them. Rats would gnaw 
where silk-robed judges sit, and serpents hiss where so- 
cial revelry now resounds. 

Consider the things most necessary to man; that 
which he eats and drinks and that with which he 
clothes himself. Let the laborer drop his hands, aban- 
don elevators, cri^js, storehouses, stables and herds to 
the worm, rat and weevil, to the inclement elements 
and the deserted fields, and humanity would be starv- 
ing within a year. The earth would be a savage-pop- 
ulated wilderness within ten years In the matter of 
food and clothing, humanity literally lives from hand 
to mouth. 



46 A BREED OF BARREN METAL 

Why then this idle boast of the power and independ- 
ence, of the productiveness of capital? Why fly in the 
face of facts and affirm that the capitalist can afford to 
rest and feed on what he has? If young Gould, the 
inheritor of his father's millions, refused, for a single 
month, to work with his hands, and others refused to 
labor for him, he would be in a worse condition at the 
end of that time than the meanest denizen of White- 
chapel. If laborers deserted him to-day, not all the 
efforts of his puny hands could save even a wreck of 
his mighty fortune from the destroying hand of nature. 
He would be poor as a savage before he had time to 
turn gray. 

Man-created wealth is not productive. The principle 
within it is decay, not growth. And bonds cannot save 
it, the edicts of capitalists can not save it — it is labor 
with the head and' hands, and that alone which must 
and does preserve it. Humanity lives on man-created 
wealth. The imprint of the laborer's hand must be 
placed upon the treasures of Mother Earth before they 
become current in nature's great banking house. There 
are no exceptions to the rule. 

The above are but a few examples of the inherent 
decay essentially embodied in all wealth, but the prin- 
ciple needs no other proof than experience common to 
all. Not a single instance can be cited of the sponta- 
neous increase of man-created wealth; not a single in- 
stance, of aught except man-created wealth supplying 
the wants of man. The decaying quality of wealth is 
self-evident when thought upon. 

But, what is the assumption of the capitalist? How 
does he justify interest-taking? As we have seen, in- 
terest or capital profits are not a remuneration for the 
toil of the capitalist, for the capitalist as such toils not. 
As we have also seen, he has no claim on that which 
is produced by another, for that would be denying the 
right of every man to what he produces by his toil, and 
would overthrow all right of property. Then he de- 
pends for his interest and profits on the assumed power 
of wealth to produce more wealth. He must justify 
the taking of a return more than the capital lent on 



A BREED OF BARREN METAL 47 

the assumption that the wealth lent increased of itself, 
for if it was another's toil which increased it, in taking 
the excess he would be taking what another produced, 
and therefore, what belongs to another. 

But we have seen that the assumption that wealth 
lias within it the power of increase is contrary to the 
facts in the case. That, without exception, the inher- 
ent principle in wealth is decay, not growth. 

The practice of interest-taking flies in the face of 
facts and'asserts the producing power of unaided wealth 
at every turn. This assumption, if carried to its logical 
conclusion, would lead to very strange results. If in- 
terest-taking is right, compound interest-taking is right. 
The principle of compound interest is, that a dollar, or 
the wealth represented by it, without any exertion on 
the owner's part will grow into two dollars in a given 
number of years, four dollars in twice that period, 
eight dollars in three times the original period, and 
that it will keep on increasing in a geometrical ratio 
until that one dollar, with its interest, would, in time, 
represent all of the wealth on the earth. The rate makes 
no difference as to the principle of the thing. Money 
at compound interest will increase indefinitely at five 
as well as at twenty-five per cent, though more slowly, 
to be sure. 

It does not require a philosopher to see the absurdity 
of a principle deduced from the power of wealth un- 
aided to increase indefinitely, yet our whole financial 
system is based on this very absurdity. And what makes 
matters worse, it is not one dollar that is assumed to 
have the power of indefinitely increasing, but several 
billions of dollars. 

A syndicate of less than one hundred American cap- 
italists, if allowed to collect interest on their capital 
at a low rate and re-invest for 150 ye'ars or less, would 
at the end of that time own the earth and all real and 
personal property thereon. This is a simple mathemat- 
ical proposition, capable of exact demonstration, and 
any one who doubts the truth of this statement may 
set all doubts at rest by computing compound interest 
on one and one-half billions of dollars for one hundred 



48 A BREED OF BARREN METAL 

and fifty years, at five per- cent per annum. Great cor- 
porations tend at present to extend their investments 
and to decrease the number of their important share- 
holders. Corporations live for centuries. A corpora- 
tion coming to practically own the earth under the laws 
of interest, is not only not impossible, but not improb- 
able. We have already instances of corporations hold- 
ing controlling interests in towns and cities and states. 
One two-hundred-and-fiftieth of the population have, 
under such methods, come to own eighty per cent of the 
wealth of the country. Figures deduced from the census 
have been so averaged and manipulated by writers as 
to make it appear that nine per cent of the people of 
the nation owned in 1890 but about seventy-one per cent 
of the wealth, but an analysis of the figures will bear out 
my statement. Either is startling enough. The only 
difficulty in the way of a private corporation monopo- 
lizing all wealth, seems to be in getting an organization 
large enough, and we are rapidly overcoming that diffi- 
culty. Will any thoughtful man knowingly support a 
principle which might give to one- hundred irresponsi- 
ble brigands all the wealth of the earth, to the exclusion 
of the other billion and a half of humans? The prin- 
ciple of interest-taking will do this. Its philosophy 
is the acme of absurdity, yet all men seem to aecpiiesce 
in the practice. 

The more wealth is saved, the more there is to bear 
interest. Hence, burdens forever increase. The wealth 
of the world is an inverted pyramid, the misplaced base 
of which becomes more unwieldy day by day. The 
interest-bearing wealth increases in a ratio which is 
ever growing more and more rapid. It is a very well 
established fact, or rather law of economics, that the 
power of producing wealth decreases in reference to the 
labor expended, after a certain limit is reached. This 
law applies to the bulk of wealth. It is called the law 
of diminishing returns. 

To be more specific: After a certain fixed limit has 
been reached, the return which land yields to the appli- 
cation of additional labor, is comparatively less. All 
wealth is produced by the application of labor to land. 



A BEEED OF BAEREN METAL 49 

We have, then, under the law of interest, liabilities 
more and more rapidly increasing and assets growing 
proportionately less. The inverted pyramid becomes 
more and more Unstable. No thinker worthy of the 
name can uphold a law which implies a flat contradic- 
tion of the precepts of nature, and whose logical conse- 
quence is to keep the world forever tottering on the 
brink of bankruptcy. 

Wealth cannot be produced with sufficient rapidity 
to keep pace with the demands of interest. The loaned 
capital must necessarily absorb all of the wealth and 
the money lender become possessed of all of the prop- 
erty on earth. Land is subject to private ownership 
and may also become the property of the money lender. 
The laborer then will be absolutely at the mercy of the 
capitalist. Deprived of land in his own right, he must 
use the land of another. Deprived of capital in his 
own right, he must use the wealth of another. All that 
he produces, more than is barely sufficient to keep him 
alive, must go to the capitalist in interest and t<> the 
landlord in rents. He must take the terms offered him 
and live on what he is allowed by his masters. If these 
masters do not wish him to live at all, all that is left 
.to him is to break the law or die. The undertaking bus- 
iness man must use the wealth and land of the capital- 
ist and landlord, or collect rent and interest for his 
ow r n, in addition to remuneration for his toil. He also 
is accustomed to set apart a percentage for profits. .If 
any capital used in business collects interest, all cap- 
ital used in business must tend to collect interest. For 
if a business man could command as large an income 
by loaning his capital and avoiding the risks of bus- 
iness, as he could by engaging in active business, he 
would lend his capital and leave active business alone. 
His object in becoming an active business man, is to 
gain both profit and interest, often in addition to wages 
for his toil. His venture fails of his object if he does 
not succeed 'in gaining both. This will sustain my large 
estimate of interest-bearing wealth. 

If the business man employs laborers, those laborers 
arc obliged to produce the wealth which is given' in in- 



50 A BREED OF BARREN METAL 

terest. If be be simply a laborer, employing his own 
capital, as are so many small farmers and tradesmen, 
he must make his labor produce interest and wages or, 
in comparison with the moneylender, lose either time 
or interest. Only capital allowed to lie idle or which 
is dissipated in unfruitful undertakings, fails to exact 
interest, and the latter is totally lost, while the former 
is a charge on the whole community. 

All our energies are bent toward applying the prin- 
ciple of interest. We undertake to pay increase on an 
enormous sum. According to the United States Census 
of 1890, the wealth of the United States, on a gold basis, 
was over sixty-five billions. Allowing for gold appre- 
ciation, it would foot up something like eighty-five bil- 
lions, and we attempt to pay interest and rent on more 
than one-half of this enormous sum. If interest on a 
billion and one-half would in a little more than a cen- 
tury absorb all the wealth on earth, what will be the 
consequences of trying to pay interest and rent charges 
on thirty times that sum? This is why the interest 
question has become one of vital importance. It is the 
great question of the day. 



/ 



CHAPTER IX. 

The Productive Power of Wealth — Instances and objections — Is capita! 
productive? — How it differs from wealth— The productive power of a machine 
— Interest not a charge for a machine's effectiveness— Interest a charge foruse 
of wealth — Is the borrower alone benefited by that use? — Men should be paid 
for what they relinquish, not for what they can extort— A scientific test of the 
productive power of wealth — How we determine the cause of steam — The ver- 
dict against the productivity of wealth— Wealth an advantage to the laborer, 
but that is not the question — The toiler is heir to all the ages, has a right to the 
use of ideas of inventors applied through wealth— Unfinished product— Other 
instances of decay not growth in wealth — The house— The mill — The horses. 

'"■Wealth cannot produce, but capital can," wisely 
remarks the apologist. ''Wealth used in production is 
productive. Does not the locomotive do more than a 
thousand men?" Even if that were true, it would in 
no way affect my argument, for there is but one class 
in the world which can convert wealth into capital. 
That class is made up of those who toil. While wealth 
remains in the hands of the capitalist, it is simply 
wealth. When he lends it it is wealth, and he claims 
interest for it whether it is scattered to the four winds 
of heaven or used in productive business. It is only 
when the life throb of the laborer pulsates through the 
decaying form of wealth that it is animated into capital. 
It is this life-throb which wrings additional wealth 
from reluctant nature. If capital is productive and 
wealth is not, then the laborer alone can make wealth 
capital, can make it productive, and he alone would be 
entitled to the resulting product 

But capital is not productive. It is wealth and noth- 
ing more, having no inherent quality different from 
other wealth. It is known by a different name because 
it is being used by a productive toiler. It is a tool in 
the hands of the laborer, a tool which rusts and rots 
and wears out just like other tools. As a tool, the la- 
borer uses it to make his labor more effective, but the 
productive power is in the laborer and not in the tool. 

51 



52 A BREED OF BARREN METAL 

Human energy aided by human intelligence is the only 
force yet discovered which can fashion nature's product 
into forms which supply the wants of man. However 
far removed from the result produced, it is human in- 
telligence which produces the result. Just as the elec- 
tric current and not the wire which transmits it moves 
the needle thousands of miles away, so the energy of 
the laborer, through the lifeless, decaying tool, shapes 
the raw material, the gift of nature, into forms to sat- 
isfy the wants of man. Capital is at best but a medium 
for applying human energy to production, not a pro- 
ductive element. You may as well say that it was the 
pencil and paper which produced the poem, or the spade 
which dug the potatoes from the ground, as that capi- 
tal produced this or that quantity of wealth. The glow- 
ing spark of human energy, whether of brain or hand, 
is the sole productive spark outside of nature's forces. 

This truth is easily verified. A machine is one of the 
most important forms of capital. The machine is made 
up of three elements: perishable wealth, the idea of the 
inventor and the labor energy of the toiler. The pro- 
ductive element in the machine, as a machine, is the 
idea of the inventor applied by the energy of the laborer. 
The wealth is the same dead, decaying thing, incapable 
of even preserving itself. The locomotive is capable of 
doing what a thousand men could not do without a lo- 
comotive. Is it the wealth in the locomotive which 
does the work? Not at all, it is no more potent than a 
pile of old iron. The inventor's idea, which planned the 
way in which this wealth may be fashioned to be used 
as an instrument, and the mechanic's skill which car- 
ried out the inventor's idea, and guided the wealth in 
the application of that idea, are the creative elements. 
Without both, the locomotive Avould be a mass of dead 
wealth and no more. 

The capitalist, as such, is'not an inventor; he toils 
not with hand nor brain to add to the wealth of the 
world. He is not a laborer. Then the capitalist who 
owns the locomotive can claim a remuneration for its 
use, when lent to another, only from the fact that it is 
wealth and not because it is a machine. He cannot 



A BREED OF BARREN METAL 58 

claim it on that account, for wealth is not productive, 
but is a charge on those who use it. Indeed the capi- 
talist does not lend the locomotive or any other ma- 
chine, as a machine, but as a specific amount of wealth. 
Unless he had an absolute monopoly on locomotives, 
the price which he could charge for one, or its value as 
interest-bearing capital would not depend upon its 
effectiveness as an implement of production, but upon 
the cost of its construction. For unless monopolized, 
the amount of wealth consumed in its construction 
would command such a machine, no matter how effec- 
tive that machine is in production. But it is not claimed 
that interest is based on monopolistic powers; then it 
must be based on a claim for the use of wealth on the 
ground that such wealth is productive. This we have 
proved to be a false principle. If based on monopolistic 
powers this fact would give it no ethical sanction. 

In determining scientifically the cause of any given 
phenomenon, when several observed elements are pres- 
ent in any given case, we eliminate those elements 
showing no positive tendency to produce the observed 
phenomenon, and look upon that element as a cause 
without which the phenomenon cannot be produced. 
For instance, in determining the element capable of con- 
verting water into steam. We conclude that the stove 
is not the cause of the water's conversion into steam, 
for the stove without the fire has no tendency to pro- 
duce such an effect, while fire on the earth or in a grate 
will produce such an effect. In like manner we may de- 
termine that the kettle is not the cause of the phenom- 
enon, and following that course we may eliminate 
everything but heat. Heat is always present when water 
is converted into steam, and when applied to water has 
always a tendency to produce such a result. We there- 
fore conclude that heat is the element which converts 
water into steam. The stove, boiler, etc., may be use- 
ful accessories, but are not the causes. 

Applying a similar test to the cause of the phenom- 
enon of production, we are forced to conclude that the 
laborer is the sole cause of the phenomenon. A spade 
may lie away until it rots, and still no sod would it 



54 A BREED OF BARKEN METAL 

upturn unless the strong hand of the laborer was upon 
it. An ax would never fell a forest oak, unless there 
was behind it the sturdy brawn of toil. A reaper would 
never cut a harvest, without the guiding, sunburnt 
hand. A locomotive would never haul a car without 
the grimy fingers at the throttle. A needle would never 
transmit a signal, without the deft ear and hand of the 
operator to receive and record it. Yet the laborer placed 
on virgin earth, without a vestige of man-made wealth, 
upturned the sod, felled the oak, cut the harvest, trans- 
ported wealth, transmitted signals and, stripped of all 
man-made wealth, could do so again. Then the laborer 
is the cause of production ; wealth is not, capital is not. 
That is the conclusion of scientific reasoning as well as 
the verdict of fact. There is not a fact in natural sci- 
ence more conclusively proven than this. 

But it is said that the wealth loaned by the capital- 
ist aids the man who uses it, and that he should there- 
fore pay for its use. Its being used aids the capitalist 
far more, even though he never received a cent in inter- 
est for its use. The laborer who uses capital more than 
repays its owner by keeping it intact. Nature in her 
divine wisdom has decreed that wealth shall not be 
hoarded. If not used by the hands of labor in produc- 
ing more wealth, nature, after a few short years, re- 
claims it as her own. Does not the laborer, then, do 
the capitalist the greatest of services by taking his 
wealth, preserving it from the wrecking hand of time 
and returning it to him intact? It is not an answer to 
say that the laborer is at the same time producing more 
wealth, a portion of which is for himself. By that very 
act he keeps the world moving, keeps up the march of 
civilization, keeps all of us from the fate of poverty- 
stricken savages. Here again we meet with nature's 
inexorable law. Toil or perish, is the decree pronounced 
against the race. It is only by fraud committed against 
the many that a few are exempt. 

The laborer unaided has gained a livelihood. He 
might do so again. For unaided capital, there is but 
death and decay. How fortunate for the capitalist that 
he can make the laborer his mediator! For there is 



A BREED OF BARREN METAL 55 

not one article of wealth which can survive without 
such mediation. 

It is true that this does not agree with the tiger phi- 
losophy of early economists. Their motto was that one 
is entitled to all that he can get by any means by which 
he can get it; if, indeed, they troubled themselves little 
about rights. On this principle the capitalist can, by 
his advantageous position in controlling the implements 
of toil, wring interest from the laborer. But does that 
make it right? That is the principle practiced by the 
tiger in springing upon the deer. That is the principle 
practiced by the highwayman in holding up his victim. 
That is the principle which says rapine is just and hon- 
orable. Why not be consistent and allow the highway- 
man to take what he can, if ability to appropriate carries 
with it the right? The ethics of civilization, on the 
other hand, teaches: to every man according to his 
labor. Man should be paid for what he relinquishes 
in serving another, for the trouble and exertion it cost 
him. There is no other subjective criterion. Where 
benefits relinquished can be readily estimated, they are 
the sole ethical guide to deserved remuneration for any 
service. One knows what a particular act cost him, but 
not what amount of benefit it was to another. On this 
ground the capitalist would not only be entitled to no 
remuneration for lending, but would by that very act 
receive a benefit for which he should pay. And we must 
introduce this principle of justice into our sociology 
before we can expect to arrive at just results. Where 
ability to exact is the measure of remuneration, right 
is might, and might is force or cunning. Such a theory 
put into practice leaves upon avarice or arbitrary power 
no ethical check whatever. 

To be sure the effort of the laborer, with the appli- 
ances which toiling hands and brains have conceived, 
fashioned and perfected through the aoes,ismore effect- 
ivj than is the effort of the naked savage. But this is 
not the question. The generation of to-day is the heir 
of all the ages. The inventive toil and ingenuity of all 
the past belong to all the people, and is more justly the 
property of him who uses them to advance the interests 



56 A BREED OF BARREN METAL 

of the whole people, than of him who wishes to use 
them for extortion only. The toiler is the heir to the 
ingenuity of the toiler. If the capitalist has succeeded 
in taking the wealth of the toiler of the past, that fact 
gives him a claim to perishable wealth alone. It gives 
him no monopoly of the great inventions which brain 
and hand have wrought. And these inventions, and 
not the fact that they comprise a certain amount of 
wealth, give every implement or machine from the soup 
kettle to the printing press its value in production. 
Hoarded wealth, untouched by the hand of the laborer 
or the inventor, Avould be absolutely worthless in pro- 
duction. It would have less effect in production than 
the kettle has in producing steam. Look at it as you 
will, wealth is not productive, but the toil of the la- 
borer is. 

If making wealth capital does not relieve it from its 
natural condition of decay; if it is still a charge on 
him who uses it, and useful only after the toil of the 
laborer adapts it to the ends for which he intends it; if 
it is useful then only as a medium of applying the pro- 
ductive forces of the laborer, the capitalist has no claim 
for remuneration for the services which his wealth 
renders in production. It has potential serviceability 
only and that serviceability is incapable of being devel- 
oped by any except the toiler. While the wealth 
remains in the hands of the capitalist, that potential 
serviceability is but a principle of decay. The laborer 
who resists that decay and developes that potential 
serviceability does the capitalist a substantial favor 
poorly repaid by the loaning of capital on the condi- 
tion that it shall be returned intact. The laborer is 
not called upon in justice to give up any of the gross 
product of his toil, except enough to keep the capital 
which he uses intact and to support the state. There 
is no hardship to him in either of .these conditions. 
The state affords protection for his toil, and keeping 
capital intact redounds to his advantage as well as to 
the advantage of all, for if capital were allowed to de- 
teriorate, productive labor could be less effectively em- 
ployed and the product would be smaller. 



A BREED OF BARREN METAL 57 

Even looking upon capital as unfinished product, the 
same rule holds good. Unfinished product from its very 
name is seen to be unfitted to supply the wants of man, 
the aim of all production. An unfinished product, like 
all other wealth, will become less and less valuable by 
the process of time. It will never finish itself, but waste 
away. The laborer alone can finish it. His finishing 
it adds to it all the value of the finished over the unfin- 
ished product, and he should have all of the difference 
as a remuneration, giving to the capitalist 'or the owner 
of the unfinished product all that the latter contributed 
to the final product, i. &, the value of the unfinished 
product. 

Let us suppose that a man has a stable of horses 
which he cannot personally use, and the value of which 
he wishes to preserve for some future time. Would not 
a toiler be doing that man a marked service by taking 
these horses and using them for ten years, and at the 
end of that time returning to the owner an equal num- 
ber of good young horses in their stead? This would be 
wealth lent without interest. (We are dealing with 
wealth, not money. ) If the capitalist had kept these 
horses, they would, within the ten years, have all grown 
old and unserviceable, and he would, in the meantime, 
have had to pay for their keeping. Under the interest 
system, he would have compelled the toiler who bor- 
rowed his horses, not only to pay for their keeping, but, 
when the horses had grown old, to return to him two 
good young horses for each one taken. It does not re- 
quire a philosopher to decide who, in this case, has the 
better of the bargain. We must keep the fact constantly 
in mind that the horses represent wealth which the 
owner cannot personally use at the time when he de- 
cides to lend it, but which he wants to preserve for 
some future time. Under the present system, he would 
sell his horses and put the money at interest; for, al- 
though horses become useless by the lapse of time, we 
have a fiction that the scraps of paper or bits of metal 
representing their value increase in worth with each 
rising sun. 

There is a house on a principal street Qi a growing 



58 A BREED OF BARREN METAL 

city. The location is the best. The appointments of 
the mansion are irreproachable. It would make an ex- 
cellent Habitation. But it is owned by an eccentric old 
lady with extravagant notions of its rental value. Be- 
sides,no tenants can endure her nagging, and the house 
is left vacant. The snows of winter have blown under 
the door and through the window cracks. Big patches 
of mould have established themselves on the damp 
floors. Rats have gnawed holes in the floors and plinths. 
An urchin bent on mischief threw a stone through a 
window of an upper story, and a heavy spring rain 
coming on, the floors are flooded. The plaster cracked 
and fell, and the timbers warped and twisted. A seed 
fell upon the stone steps and was washed into a crack. 
It swelled and grew and the steps were misplaced. The 
damage to the building from natural causes amounted 
to a couple of hundred dollars in a single year. The 
next year it was not quite so bad, but the next year 
still, was worse. The house remained vacant and was 
saved from becoming a complete ruin only by expensive 
repair. Within the fifteen years that it has remained 
idle about one-half of the original cost has been spent 
for repairs. Is not this building wealth? Is not all 
wealth subject to the same law of decay? Is it true, 
then, that the capitalist can afford to allow his wealth 
to lie idle rather than to lend it without interest? Did 
the house grow in value in these fifteen years? If one 
had occupied that house during those fifteen years and 
merety kept it in repair without paying a cent of rent, 
he would have done the owner a very substantial ser- 
vice. The owner would have been spared all outlay for 
repairs and would still have a habitation fit for occu- 
pancy. 

A great mill had been built in a prosperous manufac- 
turing district. The ore which was consumed by the 
plant became more difficult to get in that vicinity, 
while other fields of supply were opened at a distance. 
The ores in the new locality were plentiful and could 
be manufactured more cheaply there. The industry 
was transferred and the mill first built was shut down. 
The doors were closed and the building left to stand. 



A BREED OF BARREN METAL 59 

Twenty-five years passed by. The new mine became 
exhausted, and the old center of industry revived. The 
corporation which had shut down its mill years before, 
concluded to start again. An elder seed had fallen be- 
tween two heavy pieces of machinery and there taken 
root in the accumulated soil. As a result, the heavy 
pieces were displaced and the whole plant thus deranged. 
In another place, the frosts of winter had caused a 
wall to cave. The building had become shaky and un- 
safe for supporting the heavy machinery. In other 
places, rust had destroyed the fine bearings and weak- 
ened the cogs. The plant had, in fact, become a ruin, 
and but a small portion of the machinery could be used 
in the construction of a new mill. This was wealth left 
to itself. Did it grow? Now, if this plant had been 
kept m operation, as it probably might have been, had 
no interest been demanded for its use, and had it thus 
been kept in repair; although the owners had never re- 
ceived a cent for its use, they would have been just the 
value of the plant better off. They would have been 
done a very substantial service. This would have been 
lending without interest. The persons who used the 
plant would, probably, have been benefited by its use. 
This would have been reciprocity of services. 

We see that the principle upon which interest-taking 
is founded is not only absolutely false but monstrously 
absurd. That it is denied by every consideration bear- 
ing on the subject; that it leads to injustice and 
distress. The consequences of interest-taking, as exem- 
plified in our financial history, are ruin and disaster. 
Capital, profits are founded on the same principle as 
interest, and differ only in the manner in which they 
are collected. Man is entitled to nothing for which he 
has not given an equivalent in service ; and use of wealth, 
being paid for by the keeping up of that wealth, is no 
service for which other remuneration can justly be 
charged. We then conclude, that neither the landlord 
nor the capitalist, as such, should receive aught of the 
product of labor; hence the whole product should go to 
the toiler. 



CHAPTER X. 

Objections and Instances Continued — The argument of Bastiat— Its import- 
ance— Founded on the assumption of spontaneous productivity of wealth — 
Reciprocal services— The mistakes of Bastiat— Money not wealth — Bastiat's 
illustrations — The house and ship— The crowns and sixpences — Mondor's 
house — Peculiar conditions — Malthurin and the sack of corn — The same old 
fallacy — Malthurin and the man with eggs — James and the plane — The interest- 
taker's demands — What he gives up— The power of wealth and the laborer con- 
trasted — In the light of man's origin — Thora's question as to crowns and 
Bastiat's answer —Spontaneous growth again — The advantage of the interest- 
taker as told by Bastiat — The conclusion drawn therefrom — Indefinite and 
fixed remuneration — Hoarding — Our addresses to laborer and capitalist — In- 
terest generally applied — Things making themselves — Modern necromancy. 

" That ivhich the hour creates, that can it use alone.'''' 

The argument of Bastiat is considered the argument, 
par excellence, for the justification of interest-taking. 
In fact,it is the only argument on that side of the ques- 
tion which goes below the surface. If that argument 
has not proved interest-taking right, political science 
has, so far, failed to justify it. The whole gist of Bas- 
tiat's argument is reciprocity of services founded on the 
assumption that wealth is essentially and spontaneously 
productive. The lender, the economist assumes, does 
the borrower a service by allowing the latter to use his 
wealth, and the borrower should do a service in return. 
Paying interest on money borrowed is such a service, 
and unless the borrower pay interest, Bastiat holds that 
he returns nothing for the loan. 

I contend that the argument is entirely mistaken. 
Wealth is not essentially and spontaneously produc- 
tive, as I have abundantly shown. The sheep, without 
the care of the shepherd, are no more productive of 
wealth than is the barren daric. It is the care of the 
shepherd and the food which he provides for his sheep, 
which makes them productive as wealth. If sheep were 
as productive when allowed to run at large, uncared 
for, there would be no object in having shepherds. The 

00 



A BREED OF BARREN METAL 61 

fact is that the flock would at once become a prey to 
its hereditary enemies, the wolves and dogs and the in- 
clement weather, and, instead of increasing, would 
dwindle away to very small numbers. Then, as soon as 
they had become wild, they would cease to be wealth, 
and the labors of the shepherd would be turned into 
the labors of the chase, and this labor would be that 
without which the sheep would be unavailable for the 
satisfaction of human wants. This is true of all so- 
called productive wealth. Analyze it and we find that 
it can no more exist without labor than can any other 
wealth. 

Then the payment of interest is not the only service 
which the borrower does the lender. If the lender does 
the borrower an incidental service by lending him 
wealth, by that very act he does himself a far greater 
service, as it is absolutely necessary to lend wealth to 
preserve it. The borrower does the. lender a very great 
service by taking his wealth, keeping it for him and 
returning it to him without deterioration. I have 
already cited instances. 

Bastiat insists, and justly, that money is not wealth, 
and that we must determine the laws of wealth by 
considering real wealth, of- which money is but the rep- 
resentative. But this entirely disposes of his first illus- 
tration of sixpences and crowns. If money is not 
wealth we cannot deduce from it the laws of wealth. 
If Paul's sixpence consisted of wealth which he did 
not wish to use for a year, it would have deteriorated 
in value at the end of that time, I therefore hold 
that Peter, or any other borrower, would have been do- 
ing Paul a service by restoring to him his wealth un- 
impaired at the end of twelve months 

In his illustration of trading a house for a ship, Bas- 
tiat introduces a fallacy which is the groundwork of 
his plausible but fallacious argument for the justifica- 
tion of interest. The capitalist who actually lends 
wealth is one who has wealth which he cannot or does 
not wish to use immediately, or which he wishes to lay 
by and save for some future time. He is one who has 
enough for the present, besides that which he lends. 



62 A BREED OF BARREN METAL 

Lent wealth is surplus wealth, so far as the owners 
are concerned. Bastiat's capitalist is a poverty-stricken 
laborer who is asked to fold his arms and whistle while 
another laborer takes his tools and uses them for his 
own benefit. In lending, these conditions never exist. 
The wealth which is borrowed, or upon which interest 
and capital profits are charged, could not have been used 
in production if it had not been borrowed. Paying one 
to lie idle or to work with inferior tools, while by the 
use of his own he might have done better, is something 
quite irrelevant to the question of interest. Bastiat 
uses it to cover up the real question at issue. Public 
policy as exemplified in the common law has long ago 
condemned the conditions upon which Bastiat's inter- 
est argument is founded. Let us consider the real cap- 
italist, the lender of surplus wealth. 

Now, if Bastiat should say that a man, after trading 
a ship for a house, took the house to live in and wanted 
to borrow the ship for a year; and that the man who 
traded the house for the ship had another house which 
he was content to live in, and could not, himself, use 
the ship for a year, he would have stated the conditions 
under which loans are really made. The new ship- 
owner would have been put to no inconvenience in giv- 
ing up the house, as he would have been left a house 
good enough to live in. If he did not wish to use the 
ship for a year, he would wish to have it kept for him 
that length of time without deterioration in value. If 
the man who just traded away that ship should assume 
the responsibility of taking it. and should use it for a 
year and return it to the owner without deterioration, 
or in a better condition than it would have been in, 
had the owner left it idle, I contend that he would thus 
have been doing the new ship-owner a favor. The 
owner of the ship would have been relieved not only of 
the necessity of repairing his vessel, but he would have 
not even the trouble of taking care of it, and would 
have it in good order for use at the end of the year. 
The man who used the ship would also have been ben- 
efited by its use. There would have been reciprocity of 
services, the requirement of Bastiat. 



A BREED OF BARREN METAL 68 

As to Bastiat's third illustration: If Mondor spent 
his time and surplus cash in building a house to live 
in and he has no other house, he is not in the position 
of the lending capitalist. If he have more houses than 
he can personally use, he gives up nothing in allowing 
some one else to live in one of them. The house which 
Mondor cannot or does not wish to use immediately, 
is surplus wealth which Mondor wishes to save for use 
at some future time. Such a saving can be attained 
only by allowing some one else to use the property, 
and, in return for its use, to keep it in repair. At least 
that would be the most economical method for Mon- 
dor. If there were no borrowers, what would Mondor 
have done with his surplus house? He might close it up 
and pay for repairs made necessary by the ravages of 
mould, rot, rats, etc. That is, in Bastiat's illustration, 
he would pay the architect $300 per year for keeping 
his house from becoming a worthless ruin. By giving 
the house to Valerius for a specified time, he would de- 
prive himself, then, of the opportunity of paying for re- 
pairs upon it. If his other house should burn, to be 
sure, he might have delay in gaining possession of the 
house in the hands of Valerius, but this is a dim con- 
tingency more than compensated by having his house 
kept in repair. Valerius stands for all borrowers, 
Mondor for all lenders. It would be entirely irrele- 
vant to say that Mondor might lend to somebody else, 

Bastiat thinks that as a first condition of the loan, 
Valerius should refund the money paid by Mondor to 
the architect for repair of the ravages of time on Mon- 
dor's house But why should Valerius refund this 
money? Bastiat says that it is but fair. Why fair? 
Is Valerius responsible for the ravages of time? Did 
he make the natural law that houses and all other forms 
of wealth shall be subject to decay? Do these ravages 
make the house more useful to Valerius? Why then 
should he, rather than Mondor, bear the brunt of the 
law? Bastiat puerilely says that the decay occurs while 
Valerius is in the house and hence he should make it 
good. Would it not have occurred to a greater extent 
had the house been vacant? Finally, when the ravages 



64 A BREED OF BARREN METAL 

of time are repaired, who gets the benefit? Mondor, 
certainly. Mondor, then, should pay the expense of 
repairs. If Valerius should pay for the repairs as well 
as pay rent, there would have been no reciprocal serv- 
ice done him for the outlay, and, according to Bas- 
tiat's own criterion, Valerius could not be charged with 
the expense. The advantage of which Mondor deprived 
himself for the benefit of Valerius is the measure of 
the service which he did the latter, and the remunera- 
tion which he as lender should receive. He deprives 
himself, at most, only of the opportunity to use his 
house for a specified time, should a contingency arise 
making it desirable to do so. Valerius has secure pos- 
session for a time, and if for this advantage he refunds 
to Mondor the three hundred dollars of architect hire, 
if he stands between Mondor's house and the ravages 
of time, he more than repays Mondor. Where then 
comes in the excuse for interest-taking? Interest in 
this case is commonly called rent, as it is included in 
the charge for land-rent Every cent collected for rent 
is an extortion for which Valerius gets no reciprocal 
service. If Mondor is paid for what he relinquishes, 
he has no right to inquire how much Mondor is thereby 
benefited. If Valerius, while occupying the house of 
Mondor, had saved it from the flames, there is not a 
person living who could not see that he had done Mon- 
dor a substantial favor, and few would have the hardi- 
hood to say that he should pay Mondor for the privilege 
of so doing because Valerius had by the same act saved 
a habitation for himself. The case is parallel. It is 
a beneficent law that he who has most need of wealth 
is benefited most by its use. It is a relic of the savage 
in our nature that prompts to want remuneration not 
only for what we relinquish, but also to appropriate 
all of the incidental benefit which may accrue to an- 
other from our act. It is the old fable of the lion's 
share. Civilization can give it no sanction. 

On the other hand, if rent for the house were collected 
from Valerius, and Mondor were obliged to bear the 
deterioration due to the ravages of time, after a few 
years he would have no house to rent. He could not 
eat his cake and have it too. 



A BREED OF BARREN METAL 65 

Bastiat's illustration of Malthurin and the sack of 
corn repeats the same old fallacy. Malthurin, accord- 
ing to the illustration, must have his sack of corn to 
live on, or he must work for a pittance from day to 
day in order to keep' alive; and in that condition, he is 
asked to lend his sack of corn to another. What an 
illustration of a loaning capitalist! If he were a capi- 
talist, he would have had more to live on than he wished 
personally to use at that time -and that sack of corn 
would represent something which he would have been 
saving for some future time. It would have been corn 
additional to his present wants. If Jerome should take 
this corn, and, at the end of a year, when if stored, it 
would have been damaged by weevil, damp and rats, 
should return to Malthurin a fresh sack of corn in its 
stead, he would have done Malthurin a substantial 
favor. Jerome would, at the same time, have produced 
com tor himself. The service would have been recip- 
rocal and Bastiat's requirement would have been ful- 
filled. 

Malthurin would be in the position either of the man 
who was saving for future contingencies or one who 
had not yet wealth enough to apply to some purpose 
for which he was saving it, and wanted that already 
hoarded preserved for himself until he had procured 
more. As lending capitalist, he would be like the man 
who had procured eggs with which to make a cake and 
wanted them reserved until he had secured the sugar, 
milk, fruit and other ingredients. If he should store 
the eggs, they would probably spoil before the other in- 
gredients had been secured. Then, if some one should 
borrow his eggs and use them on condition that an 
equal number of fresh vii^* should be returned for 
those borrowed, when the man had secured his other 
ingredient's for his cake, he would have fresh eggs and 
would have been done an important service. 

The illustration of James and the plane is still more 
fallacious. It jumbles together in James, the rights of 
capitalist, manufacturer and inventor. The actual loan- 
ing capitalist, as such, is an idler with more, wealth 
under his control than he can personally use He 



66 A BREED OF BARREN METAL 

neither invents nor produces. To place -James in the 
position of the loaning capitalist, we must think of 
him as making a plane each year to lay by and sell at 
some future time, that h< j might finally live at ease on 
the proceeds, or gratify some ot her desire. Without bor- 
rowers to take his planes, he would have to store them 
somewhere to preserve them Rust, rot, worm and mould 
would vie with one another in their destruction. When 
James wished to sell the planes, he would find many 
of them well-nigh worthless. If William should take 
the planes and use th&ni and. return in their stead good 
new planes, would he not be doing James a substantial 
service? James would have bright new planes when he 
wanted to use or dispose of them, instead of rusty old 
ones, as would have been the case had the planes been' 
stored-. Bastiat admits that wearing out within a year 
is a necessary concomitant of the usefulness of a plane. 
I f William pays for that usefulness by supplying a plane 
instead of the one which had worn out, why should he 
be called upon to pay for it again in interest? There 
would be no justice in James having the benefit of the 
usefulness of the tool and not be obliged to bear the ex- 
pense of the wear incident to that usefulness, as well 
as the ravages of nature. The fact is, that interest 
charges are not founded at all upon the usefulness or 
effectiveness of this or that tool. They are founded on 
the assumption that wealth, apart from the idea of 
the inventor, is inherently productive, which we have 
seen to be false. 

We see, then, thai the loaning capitalist asks the la- 
borer not only to share with him the wealth which the 
laborer's toil has produced, but also to make good the 
destruction which nature visits on everything produced 
by man. This is the essence of interest-taking, yet no 
one can give a good reason why the laborer alone should 
be held responsible for the inexorable laws of nature. 
No one can say why it is just that the laborer should 
bear all of the burden for but a pittance of the reward. 

The lender sacrifices nothing. The wealth which he 
loans is surplus wealth. However potent as an instru- 
ment of production in the hands of others, it is useless 



A BREED OF BARREN METAL 67 

in his, for his hands toil not. This fact must be borne 
in mind : Unless somebody borrow the wealth of the cap- 
italist, he must stand idly by and see nature steal away 
its usefulness. Then the person who borrows that 
wealth and saves it from the decay of nature, does the 
capitalist an all important service. It is no answer to 
say that the laborer at the same time gains an advan- 
tage from the wealth which he borrows. Does the gain 
of the laborer make the gain of the capitalist any less? 
Capital cannot produce, the laborer can. The laborer 
has lived without capital, without wealth except the 
strength of his muscles and the cunning of his brain. 

With this strength and cunning alone to start with, 
the laborer has wrested from nature all that there is 
of wealth in the world to-day. Destroy every vestige 
of what men call capital and enough people would sur- 
vive the calamity to repopulate the world and reorgan- 
ize society. Destroy the power to work and in ten 
years there would not be a living human being. 

Nobody who considers what man has sprung from 
will deny this. Man did not come into a world of 
walled cities, palaces and machines. He was once a 
shivering naked savage, his implements clubs and stones. 
His bread he plucked from the trees by labor, his meat 
by labor he pursued and killed. Man always earned 
his bread in the sweat of his own brow or the brow of 
somebody else. The laborer has the producing power 
of nature; capital, the decaying principle of wealth. 
Why then can it not be confidently asserted that the 
laborer, apart from nature, exerts the only productive 
force? The laborer can put his stamp on the treasures 
of nature's storehouse and the product is wealth. Na- 
ture will not receive the stamp of capital. 

Thoreasks: "Will an extra crown appear at the end 
of a year in a bag of one hundred shillings? Will there 
be two hundred shillings in the bag at the end of four- 
teen years?"* No, nor an extra grain in a bag of corn 
(Bastiat to the contrary notwithstanding.) Herds will 
not increase without the laborer's care; fields, unfilled, 
will not yield a harvest. All of Nature's favors must 

, *It will be remembered that Bastiat said crowns would not grow, but corn 
would. Yes, with labor. 



68 A BREED OF BARREN METAL 

be wrested from her by the arm of toil. Where then is 
the justification of interest? From whatever point we 
view it, we can see no warrant for the assumption that 
wealth has the power of spontaneous growth. As we 
have seen, if wealth does not grow spontaneously, there 
is no ethical basis for interest. Each man has a right 
to what he produces and no one has a claim on what 
is produced by another. 

Let us allow the great apostle of interest himself to 
tell of the advantage which the capitalist has over the 
laborer. We have examined his reasons for believing 
that that advantage is just. Here is a translation of 
Bastiat's own words: 

"Here are two men, one of whom works from morn- 
ing until night from one year's end to another, and if 
he consumes all that which he has gained, even by su- 
perior energy, he remains poor. When Christmas comes 
he has no more ahead than he had at the beginning of 
the year, and has no other prospect than to begin again. 
The other man does nothing either with his hands or 
with his head; or, at least, if he makes use of them at 
all it is only for his own pleasure. It is allowable for 
him to do nothing, for he has an income. He does not 
work, yet he lives well, having everything in abun- 
dance, delicate dishes, sumptuous furniture, elegant 
equipages; nay, he consumes daily things which the 
workers have been obliged to produce by the sweat of 
their brows, for these things do not make themselves, 
and as far as he is concerned, he has no hand in their 
production. It is the workingmen who have caused the 
corn to grow, polished the furniture, woven the carpets. 
It is our wives and daughters who have embroidered 
these stuffs. We work for him and for ourselves. For 
him first, and for ourselves if there is anything left. 
But here is something more striking still. If the former 
of these two men consumes within a year any profit 
which may have been left to him within that year, he 
is always at the point from which he started, and his 
destiny condemns him to move incessantly in a perpet- 
ual circle and monotony of. existence. But if the other, 
the 'gentleman,' consumes his income within a year,he 



A BKEED OF BARREN METAL 69 

has the year after, in those years that follow, and 
throughout all eternity an income inexhaustible, per- 
petual. Capital then is remembered, not only once or 
twice, but an indefinite number of times. So that at 
the end of a hundred years a family which has placed 
twenty thousand franks at five per cent interest will 
have had one hundred thousand franks, and this will 
not prevent it from having one hundred thousand more 
in the next century. In other words, for the twenty 
thousand franks which represent its labor (or the labor 
of some one else), it will have a ten-fold value in the 
labor of others. In this social arrangement is there 
not a monstrous evil to be reformed? 

"And this is not all. If- it should please the family 
to curtail their enjoyment a little — to spend, for ex- 
ample, nine hundred franks instead of a thousand, it 
may, without any labor, without any other trouble 
than that of investing the other hundred franks a year, 
increase its capital and its income in such progression 
that it will soon be able to consume as much as one 
hundred families of producing workers. Does not this 
go to prove that society is nursing in its bosom a hid- 
eous cancer which ought to be removed at the risk of 
some temporary suffering?" 

Yes, Bastiat! it certainly does, and your illustrations 
of planes and ships and sacks of corn, although they 
may obscure the seat of the terrible disease, cannot 
hide its manifestations. The skilled social physician 
can see through your thin mystifications. He would 
be obtuse, indeed, who could not see a wrong in re- 
warding one person a hundred times more than another 
for a given service. He would be still more obtuse 
who could not see the fallacy, in the assumption that 
one who hoards a given amount of wealth and lends it 
is entitled to remuneration for the act ad infinitum. 

You assert that the twenty thousand franks represent 
the labor which that family has performed. This may 
or may not be true. Many of our modern fortunes rep- 
resent wealth appropriated from the toil of others. 
They may represent labor, or may be the result of labor, 
but as we have seen above, they are not labor and have 



70 A BREED OF BARREN METAL 

none of labor's productive power. Labor's result is 
wealth, nothing more, useful for consumption, or to 
the laborer in production, but of itself subject only to 
decay and destruction. Why it should claim remuner- 
ation is not clear, unless for its gradual but no less 
effective disappearance from the earth. And, after all, 
to speak of remunerating either capital or labor for 
services is utterly absurd. Inanimate things have no 
claims on man. 

But granting for the sake of argument that these 
twenty thousand franks should earn for their owner a 
remuneration, on what ground of right or justice should 
they earn a greater remuneration than twenty thousand 
franks' worth of the labor of .the toiling citizen? Why 
is the capitalist's fortune more worthy of return than 
the twenty thousand franks wh-ich have gone to the sup- 
port of the laborer and his family. The worker's 
strength must be kept up by constant feeding. The 
wealth of the capitalist is almost as perishable, it must 
also be kept up by constant accretion. The labor pro- 
duces more wealth from the strength which he obtains 
from the food which he consumes. The owner of the 
franks produces no wealth, neither do the franks. Let 
them lie. idle in a vault and they would not increase 
one jot for all eternity. Store the real wealth, repre- 
sented by them, and you would have nothing left at the 
end of a score of years. Why then should we remuner- 
ate the owner of the franks not for one year alone but 
for all eternity, while the wealth which the laborer re- 
ceives is gone when consumed and we remunerate him 
but once. We go further and not only compel the 
toiler to make good to the owner of the franks the rav- 
ages of nature, but also to pay him a hundred-fold for 
what he produced, inherited, or perhaps obtained by fraud 
or force. 

Why should we place such a premium on the saving 
of wealth and reward its production so little? Is ac- 
cumulation the end of civilization? Here again we run 
counter to natural law. Natural law- says that hoard- 
ing wealth beyond our needs is criminal folly, and im- 
poses the heaviest of fines on miserly instincts. All the 



A BREED OF BARREN METAL 71 

progress made by man has been in the direction of 
hoarding less as compared with current consumption. 
All improvements in machinery, all improvements in 
methods of industry, have been in the direction of giv- 
ing man more to use and less to hoard. And it is nec- 
essarily so. The more we hoard the larger a percentage 
of our annual product must be devoted to the keeping 
up of the wealth already hoarded, and the less we will 
have to use. Under such conditions undue hoarding 
would lead us to such a point that nearly all our ener- 
gies would be spent in keeping up the wealth already 
gained, and while our store would be large, we should 
be unable to satisfy our current wants. 

Nature rebukes hoarding in most unmistakable terms. 
Her fines are levied on every dollar's worth of wealth 
that is stored for future use. She declares that the 
whole effort of man, if he would progress, must be in 
making his product agree in comparison with his capi- 
tal, and in reducing his surplus to what is absolutely 
necessary in supplying capital for the increasing popu- 
lation. The yearly penalty in our present hoard is 
about three billion of dollars, or one-fifth of the wealth 
produced. It behooves us to make that hoard as small 
as possible, while retaining the effectiveness of our 
industries. 

Yet in the face of this, we say to the world: "You 
who have saved even so much as a laborer produces 
every five years of his active life, can live all the rest 
of your days in idleness, if you so desire, and your chil- 
dren and your children's children may do the same. He 
who has not been fortunate enough to save must divide 
with you his substance even to keeping you in idleness. 
He must toil unceasingly, and when he shall have been 
gathered to his fathers his children after him must toil, 
and a portion of everything which they produce belongs 
to you and yours by the right which your saving gave 
you. And the toilers must not be niggardly about feed- 
ing you. Your share shall every fourteen years equal 
your original saving, and yet your fortune shall never 
grow less. By the simple act of saving a fortune, insig- 
nificant as compared with what one laborer produces 



72 A BREED OF BARREN METAL 

during his lifetime, you have removed from yourself 
and posterity the curse of humanity! Man must eat 
his bread in the sweat of his brow? Or, perhaps, your 
father has done it for you ; perhaps an uncle, perhaps 
a more distant relative whom you never saw has left 
you a small amount of perishable wealth, and by that 
act saved you from the necessity of laboring, made you 
a sharer in the results of other's toil. By a sort of 
vicarious industrial merit you have been made a favored 
one of earth. 

To the man who produces unceasingly, but who can- 
not or does not save, we say: "You must stay nature's 
destroying hand. The substance of the capitalist is 
sacred; see to it that you preserve it. Keep it replen- 
ished after the waste of time, and besides see that he 
has enough to live on. Then,, if there is anything left, 
you may take it as your own. Hoarding, you must re- 
member, exempts forever from toil; mere producing 
gives only the right of sharing that production with 
those who toil not." 

These are the speeches which we act out when we 
sanction the practice of interest-taking. No questions 
are asked as to how the wealth was hoarded. Its possessor 
is virtually pensioned for all time and billeted on the 
community. Interest rewards the capitalist ad infin- 
itum. It is wrong. If for the twenty thousand franks 
representing the laborer's toil he is remunerated but 
once, the twenty thousand franks which represent the 
capitalist's earnings should gain for the capitalist but 
one remuneration. That remuneration would be the 
right to consume wealth to the amount of twenty thou- 
sand franks, nothing more. In the light of logic and 
ethics no other conclusion is possible. Men have equal 
rights. 

It will be seen how absurd this idea of in-terest is, if 
we consider that it never could be generally applied. 
If all were to save and lend their money out, or place 
it where it would produce, all should be able to collect 
interest, and to live- without engaging in actual produc- 
tion. If one can live idle by the productive power of 
wealth, all who save wealth should be able to live idle. 



A BREED OF BARREN METAL 73 

But we readily see that if all saved wealth, there could 
be no interest collected and the wealth saved would be 
useful for consumption only. All would be obliged to 
work to live. We cannot conceive of a paradise of uni- 
versal idleness. The wealth would be found to be un- 
productive. If it would be unproductive then, why not 
now? It is a false principle which cannot be generally 
applied. -Try to apply it generally and the result will 
show the unproductiveness of wealth. Wealth is unpro- 
ductive now, but it may be used as an instrument to 
take what others produce. This is what interest-taking 
means. 

Bastiat has well said that things do not make them- 
selves, and that the capitalist has certainly no hand in 
their making. He might have added that neither did 
the wealth which the capitalist saved produce these 
things. Leave it unattended and it could not have 
preserved itself from destruction. The capitalist, then, 
had no right to take these things from another. The 
wealth which he had produced had disappeared years 
before under the inexorable law of nature, yet he is still 
living on it. What an anomaly! Can one eat his cake 
and have it too? The capitalist does, but he is the only 
example of the occult phenomenon. Then it is but a 
trick. He steals the cake by legal jugglery from the 
mouths of its rightful owners, and by pretty fictions 
convinces them that it is his own. Better than the 
lamp of Aladdin, better than the magician's wand, 
even better, far better than the philosopher's stone, is 
the economic fable by whose potent alchemy the pos- 
sessor of a little hoarded wealth can multiply his gold 
ad infinitum, and levy contributions on the generations 
of men to the end of time. And it is a magic capable 
of transmission without the trouble or pains of study. 
Its adepts are legion. By its action their posterity are 
made pensioners on all the generations of men. Under 
its fecundating influence the capitalist's wealth be- 
comes the fabled cup, that, however often drained, is 
forever full; it becomes the purse which always con- 
tains a dollar. Verily the secret of the capitalist is bet- 
ter than the power of kings. 



7r4 A BREED OF BARREN METAL 

But, like all necromancy, when unveiled, interest- 
taking is but the jugglery of the faking charlatan. 
When the wealth which he has saved is gone, the inter- 
est-taker mystifies others and takes their wealth to supply 
its place. It is by the toil of others that the cup is 
kept full. He shuffles the empty vessel into the place 
of the brimming goblet, which he drains in turn. His 
magician's wand is but the barbarous custom of tribute 
which changes not but directs the stream of wealth 
from the hand of the toiling producer, into the coffers 
of the idle parasite. It has obtained so long that men 
have forgotten to resist it. Interest, the all-powerful 
necromancer, is founded on the monstrous assumption 
that wealth has within it the power of spontaneous 
growth. There is no mistaking the conclusion that in- 
terest-taking is wrong. 



CHAPTER XL 

Objections Continued — Without interest, it is said, there would be no motive 
for saving — The falsity of this proposition pointed out — A sufficient motive — 
Will the capitalist lend without interest?— The reason why he will, if he cannot 
get it— The effect upon the producer of the discontinuance of interest-taking— 
The only remedy for low wages. 

A sane man icill not wrong himself because he is not 
allowed to wrong another. 

It is asserted that without the practice of interest- 
taking, there would be no saving, that all capital would 
be destroyed, that we would be hampered in our pro- 
duction and retrograde towards the savage. Does our 
civilization depend for its existence upon the thoroughly 
barbarous principle of tribute-taking? You may as 
well say that without gluttony there would be no eat- 
ing; because one is not allowed to gorge himself, he 
will refuse to take nourishment to sustain life. Why 
would there be no object in saving if we could not col- 
lect interest? If I produce more wealth than I can use 
at present, and want to save it for use at some future 
time, will it not be as much mine when I want to use 
it, if I lend it without interest, as if I collect ten per 
cent interest for its use? The contracts for the return 
of capital and the paying of interest are in no way in- 
terdependent. One can be made without the other. I 
can, as now, make an agreement with the borrower, 
that if I allow him to use a portion of the wealth con- 
trolled by me, he will return it to me at the end of a 
certain stated period in as good a condition as when I 
lent it. That is, he will make good the ravages of time. 
It is not necessary for me at the same time to contract 
for interest, and if the agreement is carried out, I will 
be sure of getting back all that I have produced. This 
is as great an incentive to saving as any mortal would 



76 A BREED OF BARREN METAL 

require. One would, as now, look forward to a time 
of ease, when he might live on what he had saved dur- 
ing his life of active production. He would be obliged 
to lend his wealth in order to save it. The same- se- 
curity would be required as under the system of interest- 
taking. In fact, loans would be much more secure, for 
toilers would have reduced burdens to meet and be more 
prosperous, and it is a well-established principle in 
business that collections are easy in times of prosperity. 
The argument of no motive for saving unless interest 
is allowed, implies that humanity is so avaricious that 
if one cannot get what does not belong to him, he will 
not care for what he has. Self-interest will see to it, 
that enough is saved to keep things moving. Men usu- 
ally, unless checked, take all that they can get, but are 
satisfied with what they can get, unless they can get 
more. Under no interest, each would get what he de- 
served, no more. 

Under the system of no interest, men will not get rich 
while they eat and sleep and loaf or debauch, as at 
present. Statisticians cannot fill pages with calcula- 
tions showing how much richer each succeeding breath 
finds a Vanderbilt or an Astor. Mere existence will 
not be a wealth-collecting enterprise. As soon as one 
ceases to engage in productive toil, his fortune will 
begin to grow less and decrease each day by just the 
amount which he spends. He will have all that he pro- 
duces to use as he pleases, but he must take his hands 
off the production of others. To say that under such 
conditions men will not save, to say that men must 
have more than they are entitled to before they will 
take care of what they have, is like saying, that rulers 
will not govern unless the people give up to them all 
popular rights. As much as royalty has been curtailed, 
they are still not anxious to give up what is left. 

It is quite true that under a system of no interest 
there would be less lending. There would be fewer bor- 
rowers, for every one would be given his own. Then 
men would personally use more of their own wealth in 
employing themselves. But instead of being undesira- 
ble, this would be a great advantage. There would be a 



A BREED OF BARREN METAL 77 

much larger number of productive workers, much more 
wealth produced, and hence a larger share for each 
consumer. Each could more readily employ himself 
or take care of himself than now. There would be less 
motive or necessity for borrowing. But there would be 
the strongest motive for "laying by" something fol- 
ded ining years, a motive strengthened by the knowl- 
edge that what one produces will not be taken from 
him by idlers. Each man has the strongest motive, too, 
for keeping his surplus wealth in the hands of some 
one who will preserve it for him. For, as we have seen, 
wealth cannot be hoarded with impunity. 

Another will arise and say: "Suppose the capitalist 
refuses to lend his wealth. Suppose the owners of 
houses, for instance, refuse to let them be used, how 
will the poor be sheltered? 1 ' The case is impossible. 
Suppose all men were insane, we should have a terrible 
world; but they are not, and to argue from such a con- 
dition is starting with a false premise. Experience 
teaches us that men will, on the whole, do that which 
they believe to be most conducive to their interest. If 
they can get something for nothing they will take it; 
if not, they get it as cheaply as they can. If a man had 
two thousand dollars invested in a house which he 
could not use himself and for which he had no pros- 
pect of collecting rent, rather than allow that house to 
go to ruin and the two thousand dollars to be lost he 
would either let that house on the condition that it be 
kept in repair or he would sell it. If he wished to sell 
it, he would be obliged to sell it to those who wanted 
it, and on such conditions that they could buy it. If 
no interest were charged on the purchase price, any 
renter could, within a few years, buy the house which 
he occupies by merely applying to the purchase price, 
rent and interest charges now paid. In that way the 
bulk of houses now built would continue to be occupied 
as now, although many might change ownership. As 
for the habitations for the increase of population, they 
would be similarly provided. There would probably be 
surplus wealth and it must be held in some form. 
There is no better form for the preservation of wealth, 
bullion excepted, than that of buildings. 



78 A BREED OF BARREN METAL 

To the producer, the discontinuance of interest-tak- 
ing would be an unmixed blessing. He would be enabled 
to use the wealth which its owners could not use, and 
with it produce more wealth. He could, at the same 
time, make up for them the inevitable destruction vis- 
ited on wealth by nature, and increase his own sub- 
stance. He would be released from the hard conditions 
which now, so often, make production unprofitable to 
all except the money-lender. The burden on business 
which now sends the country into practical bankruptcy 
every decade,and makes ninety-five per cent of all busi- 
ness men fail, would be removed. The toiler would not 
be obliged to hand over his substance in interest to 
these who toil not, and would be able to accumulate a 
surplus of his own or to shorten the hours of toil. There 
would be no drones among those, capable of working. ■ 
As soon as one refused to work, his fortune would be- 
gin to melt away, and even if the amount of the wealth 
he had accumulated were up into the millions, instead 
of multiplying, as at present, it would begin to slip 
from the clutches of the idler It would be only a ques- 
tion of time until the fortune, however large, would be 
exhausted, and the idler and his descendants would be 
obliged again to take up their burden with the rest of 
mankind. The accumulated fortunes of the more for- 
tunate would be amply sufficient to supply their declin- 
ing years, and there would be enough also to educate 
their children and to give them a start in life; but they 
would not grow richer than their fathers unless they 
worked and added something to the wealth of the world. 
The worthless, idle scion of a wealth}^ family, would 
be a thing unknown. No fortune would be sufficient to 
bear his extravagances for a lifetime. He could not 
indulge every luxurious whim. Once amenable to the 
benign, unshackled law of nature, that man must eat 
his bread in the sweat of his brow; he w r ho inherited a 
fortune would grow poorer and poorer, unless he pro- 
duced, until finally he would be obliged to work, beg 
or starve. All idlers, rich and poor, would be placed 
on an equal footing. The wealthy idler could not save 
himself by refusing to lend. If he tried to hoard his 



A BREED OF BARREN METAL 79 

wealth, nature Mould punish him by destroying it all 
the more rapidly. 

And this, as "\ve have seen, is the only way in which 
the toiler can be benefited. There is not enough pro- 
duced for him, the interest-taker and the landlord. He 
is entitled to the entire production after keeping up 
the fixed capital of the country. If he would increase 
his wages, he must insist upon his rights, and do away 
with interest-taking, and appropriate rent. Until he 
does this he will have to bear a constantly increasing 
burden, which will finally crush him to the earth. If 
burdens are to be made lighter for toiling shoulders, 
more shoulders must support these burdens. 



CHAPTER XII. 

Interest-taking Wrong— A scientific test — Phenomena explained — Industrial 
panics -The rapid accumulation of wealth in the hands of the few— Poverty of 
toilers, etc., etc. 

"By their fruits ye shall know them." 

Interest-taking, then, is wrong. It has no warrant in 
eiliics. It contradicts natural law. Its logical con- 
sequences are absurdities. Its basis is an untruth, its 
practice an imposition. One single dollar collected 
that way is a dollar extorted, taken without a shadow 
of return. But the enormity of the amount extorted 
makes interest-taking a most potent factor in economic 
disorders. 

The scientific test of an inductive theory is the num- 
ber of observed phenomena which can be explained by 
it. There are a number of the observed phenomena of 
economic science still awaiting explanation. 

1. The cause of industrial depressions and financial 
panics manifesting themselves periodically and extend- 
ing to nations with all sorts of government and revenue 
systems, but all of whose financial systems are founded 
on rent and interest-taking. 

2. The extremely rapid accumulation of wealth in 
the hands of a comparatively few non-producers. 

;!. The abject poverty of a large percentage of the 
producing masses. 

4. The failure of improved machinery to better the 
conditions of the producing masses in a degree at all 
commensurate with the increased producing power 
which it has given to the laborer. 

5. The fact that non-producers receive much the 
largest salaries. 

G. The fact of so many laborers being doomed to 

80 



A BREED OF BARREN METAL 81 

involuntary idleness al times when they are most in 
need of employment and there is most need by others of 
the goods which they might produce. 

7. The fact that work is looked upon as a boon, and 
in times of greatest industrial depression the most ex- 
travagant undertakings seem to promote prosperity. 

8. The fact that destructive wars often stimulate 
industry and open up to nations new eras of prosperity, 
although both life and treasure have been lavishly 
squandered, and the laboring force of the nation made 

'.). The tendency of unwarlike nations to fall into 
industrial and political slavery. 

10. The tendency of lavish wealth to undermine the 
integrity of the nation and lead to its decay and final 
destruction. 

11. The decay of the American yeoman farmer, the 
unprofitabl mess of his toil and the consequent tendency 
of rural populations to drift to the cities. 

12. The heavy and rapidly increasing mortgage in- 
debtedness of the country. 



CHAPTER XIII. 

Financial Panics— The explanation of their causes— Rent and interest charges 
too large to be met— What they are— What we have to meet them— Country 
compared to a great business concern— The difference— Estimates and figures 
— Interest concluded to be the Cause of financial distress — Another way of 
reaching the same conclusion— Objections— Necessary charges of production — 
What is saved by wage-earners — A summing up. 

False principles lead to ceil results. 

It is self-evident that financial and industrial panics 
show derangement in financial or industrial systems or 
both ; just as certainly as sickness shows derangement in 
the animal system. This periodical derangement in 
financial and industrial systems has never before re- 
ceived a satisfactory explanation, if indeed it has ever 
received any explanation at all. The taking of unearned 
incomes made possible by the private collection of rents, 
and the collection of interest and capital profits fully 
explains these panics. 

The explanation is that they who produce are not 
allowed to retain enough of their product to pa} r neces- 
sary current expenses, and they fail. When many fail 
at the same time there is a panic. 

Interest is not a necessary expense of production. 
Neither is rent; at least from the standpoint of the 
whole people. If capital were lent without interest it 
could be used to just as much advantage; if the rent of 
land went to the whole people, land would be just as 
productive. 

It is not difficult to show that the rent and interest 
charges on the country's industry are too large to be 
met, and at the same time pay the current expenses of 
production. Under these conditions business men must 
fail and allow their property to pass into the hands of 
others. General failure produces panic. 

Interest and rentcharges,added to royalties and spec- 

82 



A BREED OF BARREN METAL 83 

illative profits, amount to three and one half billions 
or more per year. 

We have available to meet this charge but about a 
billion and one-half per year. This is cause enough for 
financial panic. A few estimates will show that this 
is not a hollow assumption. According to Poor's manual, 
the rents and capital profits paid on railway property 
in the year 1891-2 was, in round numbers, four hundred 
and eighteen millions of dollars. According to the ab- 
stract of the Eleventh Census, mortgages paid in round 
numbers in 1889 four hundred million of dollars in in- 
terest. According to the same authority, the manu- 
facturing capital of the country amounted in 1890 to six 
and one-half billions, and it paid an interest charge of at 
least three hundred and ninety millions. That capital 
pays an interest and capital profit of more than eight 
hundred and fifty millions, so that after allowing liber- 
ally for the amount of manufacturing capital included in 
the item of mortgages and deducting enough to meet all 
future duplications in figures, we would still have three 
hundred and ninety millions additional paid upon it in 
interest and capital profits. The mining capital of the 
country is estimated to pay a capital profit of two hun- 
dred and six millions per year. At six per cent it would 
pay a charge of over seventy millions annually. The 
public debt pays an interest charge of ninety-five and 
one half millions. The capital employed in retail and 
wholesale business pays a capital profit or interest of 
not less than three hundred and sixty millions per an- 
num. The house and office rent of persons who live in 
hired houses, exclusive of the rent of land on which 
these houses are located, is not less than two hundred 
millions per year. Bank discounts in commercial trans- 
actions are far up into the millions, but cannot here be 
estimated with any certainty. Clearings of sixty bil- 
lions per year would indicate discounts of hundreds of 
millions. 

The banks show a capital profit, net, of sixty-seven 
millions per year. Hired farms pay on improvements, 
which is, strictly speaking, an interest charge, fully 
twenty-five millions per annum. Insurance, fire and 



84 A BREED OF BARREN METAL 

life, collects an interest charge on its capital, of sixty- 
five millions. Fisheries pay an interest charge of two 
and one-half millions. 

Lumbering capital pays an annual interest charge of 
not less than thirty-five millions. Then there are large 
miscellaneous interest charges that I shall not attempt 
to estimate. The aggregate of these already named is 
not less than two billion thirty-three million. Add 
to this three quarters of a bfllion, the amount charged 
annually for rents and not included in the above, 
and a quarter of a billion or more for royalties on 
mines, oil wells and timber, then add speculative 
profits, and we will have at least three and one-half 
billions unearned charges to pay yearly. Considering 
the fact that bank discounts are not included, the esti- 
mate is extremely modest. These, as we see, are largely 
composed of interest proper and capital profits. 

This may be arrived at in another way. The wealth 
of the United States is estimated at something more 
than sixty-five billions in 1890. Homes Owned by their 
occupants, a portion of the farm property of the United 
States, and the property of some very small retailers is 
all that escapes paying interest and capital profits. Fif- 
teen billions would be a large estimate for this non- 
interest and rent paying wealth, leaving about fifty 
billions to pay interest and rent. It is a well known 
rule of economics that where any capital used in busi- 
ness tends to collect interest, all capital used in busi- 
ness will tend to so collect interest, for if the business 
man could make as much by loaning his capital as he 
could by employing it in business, he would not take 
the risks of business. On that principle we see that our 
estimates of interest and rent charges are not too large. 

Besides the interest, rent and speculative charges 
above estimated, we pay the creditor class an average 
of one billion or more per year, on account of the ap- 
preciation of our money standard. Within the last 
twenty j T ears our money standard has appreciated, as 
compared with staple commodities, between thirty-five 
and forty per cent. This is denied bv no intelligent 
person, and would involve the yearly payment to the 



A BEEED OF BARREN METAL 85 

creditor class of fully the sum named above. But we 
need take no notice of this in our present estimates, as 
we are calculating on a gold basis." 

It is conceded by all authorities, that after paying 
the current expenses of production — wages, repair, 
necessary improvements in machinery, deterioration, 
etc., ten per cent of the gross product is a very large 
estimate of the margin of profits, including rent and 
interest. The gross product of the industries of the 
United States is not more than fifteen billions yearly, 
and hence the amount available to pay rent and inter- 
est is not more than a billion and one-half yearly. This 
will fall short by two billions of meeting the demands 
upon it. 

Even without actual itemizing it may readily be seen 
that the interest charges of the country's industries are 
enormous. An attempt is made to collect interest on 
every dollar invested in business and on every dollar 
representing debts unpaid. And this must be paid out 
of the gross product of each year. From each year's 
product, the wealth of the world must be kept up. 
Buildings, machinery — everything must be kept in re- 
pair. Improvements for use in the future must be 
taken from the stock of the present. The increasing 
population must be supplied. There is not enough 
wealth produced to meet all of these obligations. 
Either the current expenses of production cannot be 
paid or the fixed charges of rent and interest cannot be 
met. If current expenses are not paid, manufacturing 
plants deteriorate, fixed capital is encroached upon, 
wages are reduced and laborers thrown out of employ- 
ment. Current obligations are not met. The business 
man finally becomes a bankrupt, or the wage-workers 
become bankrupts and outcasts depending on charity for 
support. If interest is not paid, then the wealth hypoth- 
ecated for the loan is appropriated by the lender, and 
the borrower, failing to meet his obligations, becomes 
a bankrupt. If rents are defaulted the natural resources 
of the country are withdrawn from use in production. 
He who had been using them becomes a bankrupt and 
industry is prostrated. When all expenses of produc- 



86 A BREED OF BARREN METAL 

tion exceed the gross product, the industries of the 
country are not paying as a whole. If that condition 
of things continues, the industries of the country -or a 
large percentage of them will bankrupt. A majority 
of the business of the country must go into the hand's 
of a receiver, pay up a percentage of its debts and make 
a new start. 

The country with all of its allied industries is analo- 
gous to a mammoth business concern. When it con- 
tracts greater liabilities than it can meet, it fails, and 
we have a financial panic. But unlike a mammoth 
business concern, the industries of the country do not 
bankrupt as a whole. There is always a considerable 
percentage of the individual industries of the country 
which pay a profit even in time of panic. These are 
gaining ventures while the average of all business will 
show a balance on the side of loss. These survive panic 
and others fail. A failure of the industries of the coun- 
try to pay as a whole is made manifest by the failure 
of a large percentage of the industrial institutions of 
the country. This state of bankruptcy is chronic. 
Counting everything, the aggregate liabilities of the 
individual industrial establishments of the country are 
always greater than their assets. The majority of 
individuals of the industrial world are always in a state 
of potential bankruptcy, and it is credit alone which 
stays the granting of the receivership. Men in business 
become involved as debtors and creditors. Mutual 
confidence in the meeting of all liabilities tends to keep 
business moving for a time, and industries seem pros- 
perous. Any disturbing of credit or shaking of confi- 
dence precipitates a financial crisis. There is a panic, 
numerous failures, liquidations at a discount, and busi- 
ness goes on anew until the obligations become 
obviously larger than the wherewithal to meet them, 
when another panic ensues. The failures recurring 
ever}' day act as a sort of safety valve to put off the 
time of panic. 

These are the conditions which lead to financial panic. 
It is nonsense to say that any considerable portion of 
the business concerns of the country would regularly 



A BREED OF BARREN METAL 87 

and necessarily fail unless their liabilities were greater 
than their available assets. This is the only condition 
under which a failure can occur in one case or in ten 
thousand; in a country grocery or a manufacturing es- 
tablishment with an output of millions. What brings 
about this condition? 

It is the foundation stone on which our industrial 
system is built. The basic principle of our industrial 
system leads us to recognize obligations which we can 
never meet. It is the principle which asserts that a 
dollar will grow into two dollars in a number of years 
and keep on multiplying until it represents all of the 
wealth on earth. It is because we try to pay a rent and 
interest charge of three and one-half billions with a 
net product or margin of profits of about a billion and 
one-half. It is because it costs us, besides rent and in- 
terest, about thirteen and one-half billions of dollars to 
yield a product of fifteen billions of dollars, and we try 
to charge that product with three and one-half billions 
of dollars in unearned charges also. 

There is no fiction in these statements. According 
to Atkinson, a successful' business man makes a profit 
of but six per cent on his investment, including inter- 
est. According to the same authority, a successful 
manufacturer receives less than five and one-half per 
cent of the gross product of his establishment. Accord- 
ing to the Census Report for 1890, the margin of profits, 
including interest, for successful manufacturing estab- 
lishments was nine and seven-tenths per cent. This, 

My estimate then has given the benefit of all doubt 
to the other side, and yet it shows that we fall be- 
hind about two billions per year in meeting obliga- 
tions, under a rent and interest system. 

Now let us take into consideration that more than 
ninety per cent of those who engage in business fail; 
that they make nothing whatever, taut rather lose. 
When we consider that a vast number of those who 
aid in production are so underpaid that they actually 
want for the necessaries of life, and that nearly a mil- 



88 A BREED OF BARREN METAL 

lion of persons in this country are on an average invol- 
untarily idle and unsupported by industry, we will 
conclude that if losses of the unsuccessful ventures were 
balanced against the profits of the successful ones, the 
margin of profits above necessary expenses would be 
reduced very materially. But even place that margin 
where the census figures for manufactures place it, at 
about fourteen per cent on the capital invested or ten 
per cent of the gross product, and we would have but 
about a million and one-half left after the current neces- 
sary expenses of production are paid, exclusive of rent, 
interest, royalties, capital profits, etc. Now the 
charges for these things are about three and one-half 
billions, leaving the small annual deficit of two bil- 
lions, which is not met and hoards itself up for the fu- 
ture financial panic. This estimate is made on the 
basis of a gross yearly product of fifteen billions for all 
of the industries of the United States, and this I be- 
lieve to be a close estimate.* It has been placed, to be 
sure at twenty billions, but no figures which I can 
obtain will bear out the latter estimate. I can account 
for it only on the supposition that many products are 
counted twice, in their form as raw material and in the 
finished product. The finished product alone should 
be counted in estimating the gross product of a coun- 
trv's industries,except such product as is exported, for 
wealth is useful for consumption only in its final form. 
Thus we cannot add the cost of the wool in the coat 
to the final cost of the coat, for the wool has already 
been included. In the same way the value of wheat is 
included in the flour (except the wheat exported), the 
value of the ore is included in the finished machinery, 
etc. Then, when we consider that manufactures amount 

*According to the Census figures, the gross product of manufacturing establish- 
ments for 1890 was 9.370 million dollars; the gross products of agriculture, 2,460 
million dollars; the gross product of mines, 587 million dollars. From this must 
be subtracted 5,159 million dollars, the cost of raw material used in manufactures. 
This would leave but 7, 258 million dollars in tangible wealth, produced in the 
United States in 1890, the only important item left out being lumber. During 
the same period the cost of transportation was 1,205 million dollars. This was 
of course wealth produced, or at least two-thirds of it. the actual cost of operating. 
Then personal and professional services and mercantile services in getting the 
goods to the consumer could not possibly have amounted to more than six and 
one-half billions within a year. That would show that the middleman got nearly 
as much as all others combined, and yet would place fifteen billions as the limit 
of yearly production of wealth in the United States. 



A BREED OF BARREN METAL 89 

to less than ten billions annually, including all of this 
raw material, and farm products to less than three bil- 
lions, including that sold to manufacturers as raw 
material; and that the product of mines is worth half 
a billion per year, nearly all of which is included in 
the cost of manufactures, it is difficult to figure out a 
gross product of more than fifteen billions. We have 
seen that not more than a billion and one-half of this 
can be paid in unearned incomes without trenching on 
the necessary expenses of production. But there are 
fixed charges to be met of more than double this amount. 
For the last decade we have been paying fixed charges, 
as the railways put it, on an average of three and one- 
quarter billions per year. This would aggregate thirty- 
two and one-half billions in a decade, with but fifteen 
Millions that could be applied with impunity to its pay- 
ment. This is all that could be spared after paying 
current expenses of production other than rent and in- 
terest. There is an enormous deficit. The consequence 
is that we do not pay current expenses of production. 
Business men fail instead, and they alone are paid 
whose claims are secured. The money-lender, the land- 
lord and the royalty collector, all have their claims 
secured, and the laborer and the active business man 
are they who lose and suffer. If an accounting has 
been put off for a decade, the balance against the active 
business man has become so great at the end of that 
time that he is no longer trusted; he is pressed and 
fails. This is why business panics occur, and the sole 
reason why business panics occur.. We try to pay un- 
earned incomes to a greater amount than we are capa- 
ble of. 

Another consideration will show that industry is un- 
able to bear the burden imposed upon it. According to 
the figures of the census for 1890, the wealth of the 
United States has within the last decade increased 
twenty-two billions. This estimate is made in British 
gold and ignores the appreciation of the money stand- 
ard. This would be a yearly increase of about two and 
one-fifth billions, an increase of nearly three-fourths of 
a billion over the figures deduced by estimating from 



90 A BREED OF BARREN METAL 

the observed margin of profits.* Now the charge against 
this would be an average of three and one-quarter bil- 
lions per year, leaving a very large deficit. 

But it may be said that there is no necessary connec- 
tion between the annual saving of the industries of the 
country and the amount which they are able to pay in 
fixed charges, on a solid financial basis. The fixed 
charges, like the current expenses of production, are paid 
out of the gross product of fifteen billions. That is 
quite true. There need not be any connection between 
the savings of the country and the ability to pay fixed 
charges, but as a matter of fact there is. The simple 
reason is that at least all that is consumed is really nec- 
essary for the payment of current expenses i if production 
other than fixed charges, or the charges of rent and in- 
terest. If that is true, only the wealth saved can be 
applied to the payment of rent and interest without 
trenching on the necessary current expenses of produc- 
tion, leading to repudiated obligations, distrust, panic 
and bankruptcy. It is not difficult to show that all 
that is now saved is all that could be saved after pay- 
ing current necessary expenses of production other than 
rent and interest. As a general proposition, what a 
people actually spends is the best measure of what it is 
necessary for that people to spend. There is great and 
expensive luxury in the country. That might be dis- 
pensed with. But will any one assert that what is now 
spent in luxury might not, if indeed it should not, be 
spent in supplying the wants of toilers? We have a 
million devoted to chronic idleness. Would it not take 
a goodly sum to pay such wages for such hours of toil 
that with our present product, that million would find 
a place in the industrial world, and become self-sup- 
porting, self-respecting citizens? We have other mil- 
lions living on short rations. It would take another 
goodly sum to pay them wages for their toil that would 
give them a competency and make them self-respecting 
citizens of a self-supporting republic. There are obli- 
gations amounting to millions unmet, repudiated every 

*This discrepancy may be accounted tor by the fact that the estimate of the 
margin of profits did not take into consideration the savings of wage-earners. 



A BREED OF BARREN METAL 91 

year, Those who hold them, often render a service for 
which they get no return. Would it not make a hole in 
the luxury account to meet all of these honest obliga- 
tions? Everything points to the conclusion that what 
is saved annually in the United States and appears as 
an annual increment to the national wealth, is the max- 
imum amount that can be spared after paying the cur- 
rent necessary expenses of production, other than rent 
and interest, and is hence the greatest amount which 
can be applied to the payment of rent and interest and 
other unearned charges without leading to bankruptcy, 
widespread in proportion to the amount by which these 
fixed charges exceed the net produce of the nation, or 
the yearly increase of national wealth. 

I mean by the necessary charges of production, the 
charges without which production could not be con- 
tinued in its present effectiveness. The fact of a land- 
lord collecting rent on a certain piece of land, makes 
that land no more productive. The fact of a money- 
lender collecting interest on the wealth which he lends, 
makes that wealth no more useful to the laborer. If 
the land and the wealth could both be secured without 
rent or interest, the laborer could with them produce as 
much new wealth as though both interest and rent 
were being collected. But the charge for labor is differ- 
ent. If the laborer does not receive his wages, he can- 
not get food to keep up his strength and he becomes 
unable to produce. If he receives inadequate wages his 
powers of production are impaired, his children are 
starved and grow up weak and ignorant, poor industrial 
workers, poor citizens, expensive as invalids or crim- 
inals. Productiveness cannot be kept up to its original 
standard of effectiveness. Then in manufacturing, 
machinery must be kept in repair or the plant will 
lose in effectiveness and finally become worthless. 
Raw material must be paid for or production 
cannot continue. In farming, land must be fertil- 
ized, seeds procured, machinery kept up, etc. In both, 
taxes must be paid to secure the protection of govern- 
ment. These are expenses which must be paid, and 
these are the expenses which calculations both from the 



92 A BREED OF BARREN METAL 

margin of profits and the annual savings of wealth 
show to fall but about a billion and one-half short of 
the gross product of the country's industries for each 
year. 

I say that two billions a year is above the maximum 
amount which can be applied to interest and rent pay- 
ing in this country without leaving necessary expenses 
of production unpaid, and I say it advisedly. While, 
according to the census, the country makes a net sav- 
ing of two and one-fifth billions per } T ear, nearly half a 
billion of that is saved by wage-earners and certainly 
cannot be applied to either current necessary expenses 
of production or interest and rent charges without be- 
ing re-borrowed. I use wage-earner in the broad sense. 
Those persons, professional or otherwise, who are not 
rich but receive comfortable salaries for real services 
rendered. I base my calculation on deductions from 
the census figures of distribution of wealth. If ninety- 
one per cent of the population, including wage-earners, 
own but twenty-nine per cent of the wealth of the 
country, they cannot in the past possibly have saved 
more than twenty-nine per cent of the wealth saved, 
whilfi the other nine per cent or wealthy portion of the 
population must have saved at least seventy-one per 
cent of the annual saving. As the wage-earners had 
comparatively a much larger share of the wealth of the 
country in 1880 than in 1890, between 1880 and 1890 
they must have saved less than the above named propor- 
tion, which would leave their saving but about half a 
billion in two billions, added to national wealth each 
year 

Thus if A had one thousand dollars and B eight hun- 
dred dollars in 1880 and they both together saved one 
thousand from 1880 to 1890, and in 1890 A had eighteen 
hundred and B one thousand dollars, it would show 
that B saved but one-fifth of the total saving for the 
decade, although his property was more than one-third 
of the whole. 

Then only what is left after deducting the savings of 
wage-earners from the total national savings, can be 
applied to the payment of interest and rent without 



A BREED OF BARREN METAL 93 

trenching on necessary expenses of production, and 
leading to financial embarrassment. Thus we arrive at 
substantially the same conclusion as that reached by 
estimates from the margin of profits. 

Fortunes go on piling up under the law of interest, 
and after all checks and counter tendencies have been 
negatived, we have a trade depression every ten years or 
oftener and a panic every twenty years. The fact is, 
a financial flurry can be produced any time the creditor 
class demands money, for there are not available assets 
to meet their demands and at the same time keep busi- 
ness moving. Money, the only payment accepted by 
the interest-taker, is nearly always massed in the hands 
of the creditor class or can be collected there on the 
slightest provocation. In times of confidence, business 
is kept moving by shifting liabilities, but in times of 
doubt and uncertainty, from whatever cause brought 
about, much of the business of the country finds it im- 
possible to meet its obligations and files into bank- 
ruptcy. The cleverest speculator cannot long keep his 
business moving by borrowing from one to pay another, 
unless debts are very small as compared with the busi- 
ness done. Just so with the majority of business men. 
The piling up of debts always ends in collapse, and 
their interests are so interlinked that the fall of one 
brings down a hundred. It is nonsense to say that lack 
of confidence is the cause of financial panic. Unless the 
ground principles of business produce instability, want 
of confidence can have no effect. Men realize that a 
great number of the business undertakings of the coun- 
try are not able to pay what they have undertaken, and 
they therefore lose cofidence. A building never fell 
through lack of confidence, it is lack of foundation 
rather. Those why say that the panic was caused by 
the floating of non-paying securities are right, so far as 
they go, but they might have added that a large mass 
of securities must necessarily be non-paying, and it is 
the principles which make them non-paying, coupled 
with the attempt to make them pay, which are the real 
cause of the panic. 

But some one remarks, if that were true we would 



( .)J: A BREED OF BARREN METAL 

have financial panic all of the time. Not necessarily. 
There is a little attachment to the steam engine, called 
the safety valve. While that is in order the pressure 
on the boiler is not likely to become dangerous, unless 
some unusual freak is developed. Liquidation is the 
safety valve of the business engine. Statisticians say 
that more than ninety per cent of all businessmen fail. 
These failures occur every day, every week, every month 
every year. Those who fail are the persons who have 
failed to meet current necessary expenses of produc- 
tion, together with rent and interest. If they have failed 
to meet rent and interest, their property is taken from 
them, they bankrupt, formally, their slate is cleared 
and they are allowed to start new. The arrearages do not 
have to be made up. That is a very happy regulation, for 
the arrearages of everybody, under the present system, 
could not possibly be made up. 

Again, panic is kept off for a time by using fixed cap- 
ital as a pledge to borrow back the money paid in inter- 
est and rent so that it may be applied to the current 
necessary expenses of production and the business kept 
in the same hands. This process goes on until the cap- 
ital remaining in the hands of the losing business man 
is no longer sufficienl to secure credit. His obligations 
then come to a head, he fails. Starts are made about 
the same time, then failures come about the same time. 
It takes a time for del its to accumulate. An important 
failure leads to others being watched, pressed and driven 
to the wall. We have financial panics. 

To make this point still plainer, let us take an illus- 
tration. We will suppose that a farmer owns fifty acres 
of land and on that land raises wheat. He sells his 
crop for six hundred dollars. Of that amount seed cost 
him forty-five dollars, taxes twenty-five dollars, insur- 
ance five dollars, the feed of team, one hundred dollars, 
deterioration of fences, buildings, machinery and 
stock , forty dollars, the threshing of grain, fifty dol- 
lars, and harvest help with board for the same, forty 
dollars. Let us suppose that the other two-hundred 
and ninety-five dollars is required by the farmer and 
his family to live on, and to educate his children. His 



A BREED OF BARREN METAL 95 

necessary expenses, the necessary expenses of contin- 
ued production, in his case takes allot* the gross product 
and he can pay no rent and no interest. He saves 
nothing. Now, if he and his family could live on two 
hundred and fifty dollars per year he could save forty- 
five dollars in a twelvemonth or he might apply it to 
rent or interest without showing any signs of business 
failure or becoming a less effective factor in production. 
But let us suppose that the farmer can save nothing 
(which is but too grimly true). Let us suppose that 
every dollar of his gross product is required to pay nec- 
essary expenses of production, including his living and 
that of his family. Working in that condition, he is 
out of debt and owns his farm, so that neither rent nor 
interest enter into the calculation. Now let him lose 
one crop and be obliged to borrow six hundred dollars 
at seven per cent per annum. Immediately he must 
fail by forty-two dollars per year to meet his obliga- 
tions. He must go on borrowing an additional sum of 
forty-two dollars per year, and when that with its in- 
terest aggregates more than his farm will stand as se- 
curity for, he goes into bankruptcy. 

The nation's industries taken on an average are analo- 
gous to this farmer (which, by the way, is an actuality 
and not a creature of imagination). They have an av- 
erage interest charge of three and one-quarter billions 
to meet yearly and but a billion and one-half, after 
paying other expenses, to meet it with. These indus- 
tries borrow while they can give security for the loans, 
then they fail, and we have a panic. 

I do not mean that the industries of the country fail 
as a whole. They do not, for the country is not in 
business as a whole. But enough of the individuals 
engaged in industry in the country fail, so that their 
failure produces a panic and financial depression. For 
instance, A, B, C, D and E represent the individuals 
engaged in industrial pursuits in the United States. A 
and B gain three and one-quarter billions per year, 
while C, D and E lack a billion and three-quarters of 
making ends meet. The consequence is that C, D and 
E borrow from A and B a billion and three-quarters 



yt> A BREED OF BARREN METAL 

per year while the property of the former remains suffi- 
cient to meet the loan, and when that condition no 
longer exists, or confidence is destroyed, C, D and E 
file into bankruptcy and A and B possess themselves 
of the goods and chatties of their former business con- 
freres. C, D and E, in nine cases out often, bankrupt 
by trying to pay fixed charges greater than the produc- 
tivity of the business warrants; by trying to make good 
the fabulous increase of the barren dollar and the barren 
wealth which it stands for. There is nothing occult 
about it. It is a natural consequence. Periodical panic 
and wholesale bankruptcy are the legitimate result of 
trying to apply false principles to industry. 

It is marvelous that bearded sages should gaze in 
mysterious awe at financial tornadoes which sweep over 
the interest-collecting world with the regularity of the 
tides, and ascribe them to this or that insignificant local 
cause, or shake their heads and say that they are neces- 
sary, but why they come no one knows, when conditions 
which must produce panic and bankruptcy are a 
necessary concomitant of the foundation principles 
of our financial and industrial system. 

We assume in our industrial institutions, that wealth 
contains a natural principle or geometrical increase. 
We build our financial and industrial systems on that 
assumption. We lend, borrow, trade, manufacture, 
mine, railroad, farm, upon that principle. We find 
that for the majority of the people of the nation, it 
leads to disaster and distress. If weJook a little further, 
we will find the principle absolutely false and utterly 
absurd. Yet it works well for some of the people, the 
people who assume that as the elect they have a right 
to live by the labor of others, and because they say it 
is well all others believe it so. 



CHAPTER XIV. 

The Social Extremes— Why wealth accumulates so rapidly in the hands of a 
few — Is it for services rendered by the rich? — What they do to serve the produc- 
ing masses— The method of accumulating a fortune — Explanation of the in- 
crease of wealth — The same in detail — Industrial and financial groups — What 
figures show — How wealth is transferred — The rapidity of the process — 
Checks. 

"The carriage of Dives every day throws the dust of its 
glittering wheels o'er the tattered garments of Lazarus." 

The extremely rapid accumulation of wealth in the 
hands of comparatively few, is a fact needing no proof. 
It is a matter of common observation. It may be 
legitimately deduced from the census figures that eighty 
per cent of the wealth of the United States belongs to 
one two-hundred-and-fortieth of the population, or a 
fraction of one per cent. Even after averaging results 
so as to make wealth appear as generally distributed 
as may be, conservative sociologists deduce from the 
census figures that seventy-one per cent of the wealth 
of the country belongs to nine per cent of the popula- 
tion. Exact estimates are impossible, but really not 
necessary. 

Within the memory of men still young, the million- 
aire was a very unusual citizen. Now he has grown to 
thousands, and a few of the class count their wealth by 
hundreds of millions. On the other hand, the tenant 
farmer and the tenant occupant has grown with amaz- 
ing rapidity. The number who are classed as wage-earn- 
ers, because they are poor, has grown to include by far 
the greater portion of the population. 

One naturally inquires, what is the reason for all 
this? Has the rich man become more useful to his fel- 
low man, that he should claim a larger share of the 
produce of industry? Not so far as any one is aware of. 
The time of the wealthiest and those whose fortunes 

97 



98 A BREED OF BARREN METAL 

accumulates the most rapidly, is spent in traveling 
over the world, sight-seeing, yacht-racing, gambling, 
feasting and toadying after foreign nobility, more idle 
and useless than themselves. 

When the millionaire comes home, he goes to work 
planning and building mansions for himself, building 
monuments for his own aggrandizement, or perhaps 
corrupting politics if he happens to have a taste in 
that direction. This is the millionaire of the second 
or later generations. His study is, in short, how he can 
spend the most on his own little, insignificant person, 
and although he toils not neither does he spin, not 
Solomon in all his glory fared like one of these. 

This millionaire had an ancestor, a hard-headed, 
close-fisted, cunning, calculating fellow. He (the an- 
cestor) learned early in life that no great fortune could 
ever be amassed in productive enterprise; that the 
productive power of the effort of one man is very lim- 
ited in amount and at best can only give him a com- 
petency. He also learned~that if one wishes to become 
immensely rich, he must do so by appropriating the 
result of others' toil. He learned that there are just 
two legal methods by which this maybe accomplished: 
(1), by appropriating the land which is to be used in 
industry and charging laborers all that they will pay 
and still use the land; (2), by controlling the wealth 
which was to be used in production and charging for 
its use all that was left after paying rent, except merely 
enough for the laborer to live on. While levying 
these charges, to be sure, he speculated; i. e., made 
the rent and interest charges extraordinarily large 
wherever he could, by controlling, at critical moments, 
the land and the capital of the laborers. Thus this 
hard-headed business man spent his life in appropriat- 
ing what belonged to others. He laid a foundation by 
which his progeny might with greater ease continue 
like operations for all time to come. He was not par- 
ticular about methods, if within the law. Wrecked 
properties and violated trusts too often strew the way 
of the millionaire. The enormously rich are not rich 
by remuneration for their services to fellows, but by 



A BREED OF BARREN METAL 99 

taking all that they can get by any means at hand, and 
they find rent and interest the most convenient means. 

According to estimates made above, the landlord and 
money-lending class save about two and one-half bil- 
lions per year. One and one-half billion of this appears 
as an addition to national wealth, and another billion 
is lent back to business undertakers to tide them over 
to the day of reckoning. Thus this class would save 
about twenty-five billions in a decade and fifty billions 
in twenty years. This fully accounts for the increase 
of wealth in the hands of the very wealthy. 

With a surplus each year to re-invest and an enor- 
mous interest-bearing capital, capable of absorbing all 
possible production, a caste of wealth must soon be 
formed, almost absolutely secure in the possession of 
their property. We must have a stable aristocracy 
founded-on wealth. That class must in time have ab- 
solute control, as it will own all of the wealth. Inter- 
est will outrun the best inventive genius. The more 
wealtfiy this class becomes, the greater the number of 
persons who will be taken from productive occupations 
and retained by the wealthy to attend to personal 
wants, and the heavier will become the burden on the 
actual producers. Under the interest system the ex- 
tremes will ever become more marked. But, to be more 
specific. 

Following a convenient classification by another 
writer, we may divide the business community into two 
classes or groups: the financial class, who engage their 
talents in making gold and silver breed, and the indus- 
trial class, who perform all the work of production. 
All who lend on interest or use their wealth in any way 
to secure that which is produced by another, without 
parting with any of that wealth in return, are so far 
members of the financial class. All who produce or add 
to the sum total of national wealth are so far of the 
industrial class. The financial class lives by collecting 
rents and interest or incomes founded on these charges. 
The industrial class pays all rent and interest, as well 
as all other charges earned or unearned. Rent and 
interest are usually secured by liens on property, and 



100 A BREED OF BARREN METAL 

must, usually, be paid. Hence the financial group, 
except in a small percentage of cases, receives its share 
of the product, and if any default is made, it is in the 
necessary expenses of production, due to members of 
the industrial group. Default can be made only in the 
payment of obligations between members of the indus- 
trial class. That is, members of the industrial class 
must bear all loss. 

Thus, while each year sees thousands of the members 
of the industrial group go by the board and turn their 
effects over to the financial group to satisfy fixed 
charges, the members of the financial group lose little 
and grow constantly richer. While industry pays, they • 
receive their increase; when industry fails, they receive 
both increase and principal. 

There are certain beasts of prey which fatten by the 
misfortunes of their brother animals. There is a class 
of non-combatants who follow in the wake of fighting 
men and fatten on the spoils of the fray. They keep 
out of danger, skulking in the rear until the battle *s 
fought, and when others are wrapped up in alleviating 
the sufferings of the unfortunate, they swoop down 
upon the wreck-strewn field and gather up the spoil. 
That is the position of a large number of the camp fol- 
lowers of the peace army, and whether the hosts meet 
with success or reverses, whether there is panic or pros- 
perity, they reap a harvest. They are sure to avoid 
danger. During prosperity, they sow the seeds of dis- 
aster for others. When disaster ripens they get the 
corn, the toilers the tares. Interest is the winnower. 

The rent and interest charges of three and one-half 
billions are about two billions more than can be met 
annually after paying necessary expenses of production, 
but, as rent and interest must be met, the members of 
the industrial group who fail to otherwise meet them 
are forced to bankruptcy or to borrow back a portion of 
the rent and interest fund in order to meet current ex- 
penses. For the wealth which has passed to the finan- 
cial group is the only fund to borrow from except the 
half a million or so saved from the wages of labor and 
superintendence. The financial group lends only on 



A BREED OF BARKEN METAL 101 

security, and the wealth necessary each year to pay 
current expenses can be secured by the delinquents in 
the industrial group only by hypothecating each year 
an additional amount of their fixed capital to the mem- 
bers of the former group. It amounts, really, to an assign- 
ing a portion of the fixed capital of the industrial 
group. Three-fourths of the net yearly increase of na- 
tional wealth accumulates on the hands of the financial 
group and, before it can be used in production, must 
be returned to the industrial group. A half million 
is saved in the industrial group, and if this is lent it 
makes its possessors just so far members of the finan- 
cial group, and begins a transfer of property from the 
less fortunate to the more successful members of the 
group of workers. In this way about two and one-half 
billions yearly of fixed capital passes from toilers, 
who constitute the members of the industrial group, to 
the money lenders, or financiers, as they are pompously 
styled. This is sufficient fully to account for the rapid 
accumulation of wealth in the hands of the few and the 
consequent impoverishment of the many. The change 
is much more rapid than would be indicated by the 
absorbing by the financial group of all the yearly in- 
crease of national wealth. 

This assigning of fixed capital has but one result: 
final bankruptcy. It must constantly cripple the busi- 
ness of the undertaker and cut down his income. If 
he could not meet smaller expenses with a larger in- 
come, he cannot be expected to meet larger expenses 
with a smaller income. He finally goes to the wall and 
the financial group gets all of his property. This will 
occur as soon as he fails to meet obligations or obliga- 
tions become so large as to make the security doubtful, 
and will, of course, make congestion of wealth more 
rapid. 

While it is not probable that those who receive in- 
comes from rent and interest, spend from those incomes 
more than a billion annually, such income amounts 
to three and one-half times that sum. But about a 
billion and one-half of this appears yearly in the incre- 
ment of national wealth and the remainder must repre- 



102 A BREED 0E BARREN METAL 

sent what is re-loaned to the unsuccessful to pay- 
current expenses of production. This sum gradually 
gives the financial group control of the fixed capital 
already in existence, as well as most of the increase. 
The financial group thus becomes rich more rapidly 
than the nation at large; and national increase in 
wealth may not mean prosperity of the producing 
masses. That is the fact. The financial group can be 
prosperous, while they exact tribute from the masses 
as large as business will bear. 

To be sure, the classes are not rigidly fixed. A few 
drop, each year, from the financial group into the in- 
dustrial group,a few go from the industrial to the finan- 
cial; but that neither makes richer those who are left 
in the one nor poorer those who remain in the other. 
Many individuals are members of both groups, but as 
members of the financial group they get their incomes 
from the industrials other than themselves, and thus 
their double relation makes no easier the lot of the in- 
dustrials who are not also financiers, but the opposite. 
They do make it appear that they have earned their 
wea th as industrials, and make it difficult physically 
to separate the non-producing from the producing 
classes. 

England is sometimes cited as an instance of de-cen- 
tralization of wealth. It is held that in England wealth 
is now more generally distributed than ever before, and 
this is supposed to prove that there is no danger of un- 
due centralization of wealth. But conditions in Eng- 
land prove nothing as to other nations. England is 
the loan-shop of the world, and her interest tribute is 
levied on the whole world beside. Three-fourths of 
the citizens of England may become rich by interest- 
taking and yet not receive a dollar from a citizen of the 
island. English wealth is produced abroad. Even 
though the facts are correct, the conclusion of the 
apologist is not warranted. 

But, it is said, large fortunes are not made by inter- 
est-taking, but are amassed by speculation. The prin- 
ciple is exactly the same. It is the application of the 
idea of taking all that one can extort by any means by 



A BREED OF BARREN METAL 108 

which it can be extorted, on the assumption that some- 
how his acts have created what he takes. The rate is 
larger in speculation, but the plunger loses so often, 
the business is so uncertain, that it does not begin to 
be as profitable as interest-taking. When great for- 
tunes are amassed, speculation is discarded altogether 
and interest-taking is used as a means of perpetuating 
the fortune. Then interest-taking, and a currency 
suited to that purpose, are the instruments which make 
speculation possible. It is by manipulating currency 
through the power of interest-taking that prices are 
speculatively affected and all speculative business car- 
ried on. Destroying interest-taking would destroy spec- 
ulation and thus do the country a service of inestimable 
value. The business of the speculator is appropriating, 
not producing, and he and his are a dead weight on the 
shoulders of the productive toiler. He gives absolutely 
no return for what he gets. 



CHAPTER XV. 

Extreme Poverty — What the interest-taker demands — What he receives — Its 
effect on the toiler — The yearly product limited — No way of increasing the 
share of the laborer without diminishing the share of some one else — How 
limited in quantity the product is— Make producers of non-producers. 

" The poor ye have always with you." 

On the other hand, we have abject poverty on the 
part of a large percentage of the producing masses. 
This is a necessary result of one class being immensely 
wealthy. They are immensely wealthy because they 
take what rightfully belongs to others, and these others 
are poor because their substance is taken from them 
and no return given for it. 

As we have seen above, the taker of rent and interest 
gets all that he bargains for. and he bargains for enough 
to make him a millionaire and his victim a pauper. A 
man with one hundred thousand dollars lent on farm 
mortgages, can spend the average income of seventeen 
farmers and at the same time save the average income 
of ten farmers. Thus he may spend each year the sal- 
ary of one of our congressmen and save sufficient to die 
worth two hundred thousand, so that his son may save 
twice as much and spend twice as much as he, without 
ever doing the slightest service to any one else on earth. 
Thus his posterity may become richer and more extrav- 
agant. The further they become removed from those 
who have done something useful, the more they can 
collect for idleness. Put at interest at five per cent, 
one hundred thousand dollars will double itself in four- 
teen years; at six per cent it will double in twelve 
years; at seven per cent in ten years; at eight per cent 
in nine years. This is much more rapidly than fixed 
capital ?an accumulate, and an attempt to carry out 
such accumulation compels a large percentage of the 
population to subsist on short rations. 

104 



A BREED OF BARREN METAL 105 

As was shown above, there is a limited gross income 
to be divided between the landlord, capitalist and la- 
borer. If any one gets more lhan his share the others 
must get less. But how very limited this income is, 
but few realize. If every cent that is left after repair- 
ing the annual deterioration of wealth, were given to 
the toiler, he would receive less than five hundred dol- 
lars per year. If the product were distributed equally 
between the inhabitants, men, women and children, 
each would have but about one hundred and eighty-five 
dollars to live on. Toilers cannot afford to share their 
meager income with idlers. The only way to increase 
wages and do away with abject poverty among pro- 
ducers, is to turn the rent and interest charges into the 
wage fund. If non-producers get three and one-half 
billions of dollars per annum, producers get just that 
much less than their share. When we consider that 
the whole product, besides enough to keep up capital, 
is barely sufficient to keep the workers, it is not diffi- 
cult to see why some persons want. 

I am aware that these facts are used by a few weak- 
minded individuals to support the taking of rent and' 
interest. They tell us, with sublime simplicity, that 
this charge does not amount to enough to make any 
difference in the wages of the laborer, and show how 
little he would get if he were to get it all. It would 
increase his wages by at least fifty per cent. 

Wealth is produced by labor alone, and the only way 
to increase the product and consequently the wages or 
share of the producers, is to make non-producers work 
productively. This can be done only by depriving them 
of their ability to appropriate a portion of the wealth 
produced by others. For, while one can live better by 
idleness, he will not produce. 

If present non-producers became producers, several 
consequences would follow. The family of non-producers, 
who now spend one hundred thousand dollars annually, 
necessarily make one hundred toilers or more non-produ- 
cers, in so far as other toilers are concerned. All that a 
non-producer or any of his servants consumes is con- 
sumed non-productively, so far as the toiler is concerned. 



106 A BREED OF BARREN METAL 

The horses which the non-producer uses, the man who 
cares for these horses, the man who produces feed for 
these horses, the man who feeds the man who produces 
feed for these horses, are all non-productive workers, 
in their relation to producing classes. What they do 
in no way aids any one who toils. For all this effort, 
all the product represented by the one hundred thou- 
sand dollars consumed yearly, is devoted to one object 
and but one alone: supplying the wants of one who 
does nothing to supply the wants of others. Industri- 
ally, it is a total loss. So far as toilers are concerned, 
except those actually working for the idler, it may as 
well have been burned on the spot on which it was pro- 
duced, the only difference being that the loss would 
fall on different individuals among the toiling masses. 

If that one hundred thousand dollars were spent by 
producers instead of non-producers, it would make. the 
former just that much better off, for every dollar would 
command a dollar in some other sort of service. The 
labor which that fortune now hires for the non-pro- 
ducer would be engaged in creating things to supply 
the wants of the producer. The coachman might be 
making shoes for toiling feet; the butler planting corn; 
the groom raising beef; the farmers who supplied the 
larder and stables supplying the toilers with bread. 
The non-producer, turned into a useful citizen, might be 
at the forge or lathe or counter, helping to increase the 
stock of wealth. At worst he could but go to the asylum 
for the feeble and could be supported at a trifling per- 
centage of his present living. 

The painter of daubs for the non-producing patron, 
might be applying a more useful brush to a house or barn 
to preserve it from decay; or if he was, perchance, an 
artist of real talent, he might be creating works of art 
for the edification of those who formerly furnished the 
wealth to pay for the pictures which the non-producer 
haughtily called his own. 

To illustrate: let us suppose that five men engage in 
five branches of trade; one producing bread and drink, 
one meat, one clothing, one tools and machinery, one 
carrying these things from each to each, and a sixth 



A BREED OF BARREN METAL 107 

partner laboring to supply the aesthetic and intellect- 
ual wants of the community. Each produces what the 
other wants, and each adds to the wealth of all. Now 
let an outsider come who controls the land and the 
capital which these men recmire, and compel each toiler 
to give him a portion of what that toiler produces, as 
well as to spend a portion of each day producing some- 
thing which none of the toilers use,but which the land- 
lord and capitalist wants for himself. Of course the 
latter dignitary does not deign to produce anything. It 
is enough for him to attend to his "business; 1 ' i. e., 
hatch schemes for taking a portion of what is produced 
by those who work. It is evident that the time con- 
sumed in producing what is given to the capitalist is 
time thrown away, so far as the toilers are concerned, 
for some one else gets the benefit of that labor and re- 
turns nothing for it. If that time were devoted to pro- 
ducing what the toilers used it would make them that 
much better off. It is a case exactly parallel to that 
of the toilers of the nation. By destroying unearned 
incomes, we must make all toilers, and make the effort 
of each add to the wealth of all. This is the only way 
to relieve distress. Our failure to do this fully accounts 
for the abject poverty of many of those who toil. 



CHAPTER XVI. 

Improved Machinery— Its failure to ameliorate the condition of the laborer- 
Wages now and in 1450 — The increased producing power of the laborer— Why 
does he not get the benefit of this power? — Interest-taking is to blame — The de- 
mands of interest increase geometrically, producing power does not — Capital- 
ists take all increase — The inventor not rewarded — Men are thrown out of 
employment, and competition keeps wages down so that the capitalist can take 
all increase. 

"It is doubtful whether improved machinery has lightened 
the burden of any toiling human.'''' 

The invention of labor saying machinery. 

Improved machinery has failed to ameliorate the con- 
dition of the toiler in a degree at all commensurate 
with the increased producing power thus given to the 
laborer. Thorold Rogers,* a recognized authority on 
this subject,- states that the labor of Englishmen in 
obtaining the necessaries of life was as effective four and 
one-half centuries ago as it is to-day. Even more so. 
Yet there is scarcely an occupation at which a laborer 
cannot accomplish many times as much in the produc- 
tion of wealth as he could even a century ago. What 
becomes of the surplus? As Mr. Rogers shows, the 
laborer gets but a small part of it in wages. Govern- 
ment, to be sure, is a little more expensive, but that 
does not begin to account for it. Thore is but one other 
place to which it can go: as unearned income to the 
landlord and the usurer. 

Instance the one occupation of agriculturist With 
the gang plow, the seeder, the horse rake, the sulky 
cultivator, the horse-fork, the self-binder and the power 
thresher, one man can accomplish the former work 
of at least half a dozen. Has he half a dozen times as 
much wealth at his disposal each year? Not at all. 
Unless he lives well nigh as primitively as he did three- 

*Work and Wages— 539-541 et seq. 

108 



A BREED OF BARREN METAL 109 

quarters of a century ago, he cannot make ends meet. 
People say he is extravagant, his family want comforts 
which their grandmothers did not have, hence he is not 
prosperous. These critics scarcely realize that the 
prodigal luxury of the farmer is held within the bounds 
of three hundred dollars per year, while the critics 
groan because they are limited to from twenty to forty 
times that amount. And the farmer is not an excep- 
tion in this respect. The man who by use of the ma- 
chine makes half a dozen pairs of shoes where one could 
be made a century ago, or ten yards of cloth to one 
made by his father, or ten tons of iron as readily as one 
could formerly be made; or carries a ton of produce ten 
miles as cheaply as it could formerly be carried a mile, 
receives little more real wages than his fathers did. To 
be sure, the laborer of to-day has things which even the 
wealthy could not have a few years ago, but for the 
substantial necessities of life he is but little better off. 
His environment compels him to live on a different 
scale from that of the past. It makes necessities to- 
day of the luxuries of former days, so that what he 
must have presses as closely as ever to the limit of his 
income. And as compared with the wealthy,the laborer 
of to-day is infinitely poorer than his laboring ancestors 
were. The effect of machinery has so far been the piling 
up of large fortunes, rather than lightening the burdens 
of toil. 

It is all due to the principle of interest-taking. The 
march of machinery has not increased net production 
in a geometrical ratio. Interest demands the geomet- 
ric increase of product to keep pace with its demands. 
Interest was and is charged, as we have seen, on nearly 
all capital used in production, directly or indirectly. 
Interest-takers, therefore, control all of the product 
and claim all that is left after giving the majority of 
laborers a mere living. 

We will suppose that a man is able by his toil with 
the implements of three-quarters of a century ago, to 
secure a living for himself and his family. Such was 
the fact. He owned his farm or shop and retained 
nearly the whole value of his product. The inventor 



HO .A BREED OF BARREN METAL 

came, with his improved processes. A business man 
adopted it and loaned it to the farmer or mechanic, 
with the understanding that the lender should have the 
lion's share of the product. The contract is carried out. 
The lion's share of the product goes to the lender in in- 
terest and is re-lent to bear interest; the charges 
which the mechanic has to meet multiply and he find? 
that he still has left barely enough to support his fam- 
ily. But the lender has also enough to support his 
family, and to support it on a scale of which the me- 
chanic never dreamed. Thus it went with every inven- 
tion. It was controlled as capital, lent, and the 
increased effectiveness went largely to idlers, under the 
laws of.rent and interest. 

The inventors even, as a rule, get little of the benefit 
of the fecundity of their ideas in the world of industry. 
They, as a class, die poor. It is the man with the cap- 
ital which is assumed to grow, who is lord of creation 
and for whom all other men toil. He is the interest 
baron, the collector of increase on decaying wealth ! 

Then, in the manufacturing industries, the increased 
use of machinery tends to throw the laborer out of em- 
ployment and fill the labor market with men eagerly 
competing for places. The capitalist can run his busi- 
ness with fewer hands. The competition of wage- 
earners becomes more fierce. Those who can secure 
places do not dare to ask for more than they were re- 
ceiving when laboring with poorer mechanical appli- 
ances, for there are many to take their places at such 
a wage. As a result the capitalist gets the whole benefit 
of the increased effectiveness of the machinery. It is 
paid in interest, rent and capital profits, which differ 
in no way from interest. The effectiveness of inven- 
tion, under the system of interest-taking, accrues to 
him who controls the material of which the machine is 
made. While interest and capital profits are collected, 
invention must have the immediate effect of decreasing 
wages, and making fewer bear the burdens of produc- 
tive toil. 



CHAPTER XVII. 

The Large Salaries of Non-Producers — How accounted for — The limit of 
tangible production — The wages of superintendents— Measure of remuner- 
ation—The principle that one has a right to all that he can get — The measure of 
remuneration thereunder — Brain work — The standpoint of the discussion — 
The great money-getter — Remuneration for mental and physical exertion — 
The lawyer — The doctor — The literary man — Works of art— The inventor — The 
range of talent — Ability — What is the source of large incomes -Are the people 
interested in the size of salaries of private coporation officials? — Wealth and 
its responsibilities. 

What one relinquishes, not what one can extort > is the 

measure of his service. 

Non-producers have much larger incomes than pro- 
ducers. In fact, one's income is often in inverse ratio 
to the service which he does his fellow men. This fact 
cannot be accounted for on the theory that every man 
should be rewarded according to his services, or that 
each should have what he produces and that alone. It 
must be accounted for in some other way. 

As for tangible material production or value of ser- 
vices, seven hundred dollars per year is the utmost 
average limit to human power, and as one-third of this 
is eaten up in repairing the natural decay of capital, 
less than five hundred dollars per year is left for the 
wage of the average toiler.* Men may sometime become 
morepotent producers, they are becoming so each day, but 
the above is the limit reached with the present quality 
of land and machinery. There is a difference in indi- 

*This, to be sure, is but an average at best, but it is not far from the mark. 
There are probably twenty five millions of persons, including women who take 
care of homes and children, in gainful occupations. The yearly gross product 
is not more than fifteen billions, and this would be a product of but six hundred 
dollars for each worker. It would take a product of twenty billions a year pro- 
duced by twenty million toilers to bring individual product up to one thousand 
per year, the figure adopted by Mr Atkinson. On the other hand, there are 
many returned in census reports as being engaged in gainful occupation, who 
never add a dollar's worth to the wealth of the community, and there is no way of 
re-estimating the number of this class. Hence an estimate of average /■;;• capita 
product is more or less a guess, but I think I have put the figure high enough. 
Even at one thousand dollars, the per capita yearly product could not account, 
for yearly salaries. 

Ill 



112 A BREED OF BARREN METAL 

viduals. Counting extremes, there is a wide difference 
in the ability of individuals to produce. But that differ- 
ence does not begin to account for the difference in 
wages. The largest giant is scarcely twice as tall as 
the smallest dwarf. Just so the most prolific worker 
can scarcely produce twice as much as the most ineffect- 
ual producer, in full health and. vigor. Yet the yearly 
income in one case is often one hundred times that of 
the other, or even much greater. 

The wages of superintendents should be only as much 
greater than those of the producing rank and file as the 
ability of the superintendent could increase the 
product of those whose labor he is directing, beyond 
the limit which could be reached under the direction of 
any person within the rank and file of the producers. 
Experience teaches us that talents do not differ greatly 
in the same class, and that in any large body of workers 
there may be found several who could do quite as well 
as superintendent as the person who actually holds the 
position. This is verified every day by promotions from 
the rank and file to the superintendence and manage- 
ment in all branches of affairs, public and private. 

Then, either on a competitive basis or as a return for 
actual services, the wages of superintendents should 
be little if any above the wages of the best workers 
whom they direct, and not very much above the aver- 
age. The facts are largely in accordance with this where 
the superintendent is a mere hired foreman and does 
not include in his remuneration, capital profits of some 
sort. 

Then the pay of the actual toiler or the toiler of su- 
perintendence, based on tangible product, cannot be 
rightly much above the limit of the tangible average 
production of one individual. This would hold the 
maximum salary down to about one hundred dollars 
per month. 

But with the principle admitted that one has a right 
to take as much as he can get, and to get as much as 
he can by any means at his disposal, whether it has 
been produced by himself or others, there is no limit to 
what one may take as income, or, more accurately, it 



A BREED OF BARREN METAL 113 

is limited only by what he has taken already. The cap- 
italist, with one hundred thousand dollars, can levy 
tribute on one hundred laborers, and take from eighty 
to one hundred dollars per year from each, giving him 
an income princely as compared with the incomes for 
these laborers. He can afford to pay a non-producing 
lawyer two thousand dollars per year to do this for 
him, so that the man with capital need not turn his 
hand, and still he will have a goodly net income. The 
capitalist with a million can pay ten times as much to 
a parasite of the law to financier for him and still live 
like a prince on the tribute exacted from toil. Under 
the law of interest, the wages of idleness may be any 
sum falling short of the gross product minus the cost 
of an indifferent living to the majority of producers, 
while the wages of toil is rigidly fixed at a most moder- 
ate allowance. 

But, say the apologists, these men are paid for brain 
work. So is the cracksman who loots their safes, but 
it is brain work of the sort which should not be encour- 
aged. It is the human intellect directed to the prob- 
lem : "How much can I take from others without giving 
aught in return?" Mental labor should have its reward. 
The man who invents a useful machine; the man who 
subdues a natural force to the use of man; the man who 
stirs the souls of men with noble thoughts, inspires the 
living glories of the magic canvas, or the glowing life 
of the chiseled marble, is a public benefactor, deserv- 
ing of substantial reward. But does the capitalist claim 
remuneration for any of these acts Not at all. His 
remuneration comes from the exercise of that stealthy, 
cat-like cunning which in the days of force enabled 
primitive man to steal upon hisfellows,grasp a momen- 
tary advantage, and carry off property after wasting 
life. He takes because his wealth gives him the power 
to do so. 

That the brain work of the benefactors of the race 
should be remunerated is no reason why the able law- 
yer, who uses his God-given intellect to pervert the 
laws which he has sworn to support, in order that a 
great corporation or a petty thief may take from others 



114 A BREED OF BARREN METAL 

what their toil has produced, should be looked upon 
as a beneiactor or receive, from the very people whom 
he labored to injure, a princely remuneration for his. 
treasonable iniquity. 

I am discussing this question from the standpoint of 
the real producer, from the standpoint of the greatest 
good to the greatest number. Ninety per cent of the 
people have no interest in supporting the pretensions 
of the other ten per cent, who assume a superiority to 
their fellow beings and think that somehow they (the 
wealthy) were divinely commissioned to enjoy all of 
the good things of this life at whatever cost to the re- 
mainder. The standpoint of the producing toiler is the 
only standpoint from which any honest economist can 
look at the subject. Either men have equal rights to 
what they produce, or they have not. If they have not 
some men must be naturally or divinely delegated to 
rule over their fellows and appropriate what they 
choose. The appropriator, in a state like this, must 
be the judge, for there are none other. Might is right 
and cunning might. There is no limit to extortion, 
ethics is but a myth and economics the mutterings of 
fools. The people must take thankfully what their lords 
and masters give them. There is no middle ground. 
One must either accept the foregoing or admit that 
men have equal rights in all things, and base his eco- 
nomic philosophy on this principle. On the principles 
of equal rights of man, I hold that because intellect 
applied to the aid of toilers should be rewarded, is no 
reason why intellect applied to despoiling toilers should 
be -rewarded. 

The great money-getter may work hard, have anxious 
nights and sleepless days, but if that toil and anxiety 
is directed to wrecking a railroad that he may gather a 
fortune from the ruins, his toil should receive the meed 
of the criminal, not the reward of a productive laborer. 
Is his toil directed to getting wealth for himself at the 
expense of others, or for others to whom it does not be- 
long that he may share the plunder, or is it directed to 
wresting from nature wealth for the benefit of all. him- 
self included? On the answer to this question depends 



A BREED OF BARREN METAL 115 

whether the mental or physical effort of this or that 
particular person is rightfully entitled to remuneration. 
And it applies to the lawyer or the bank president or 
the railway financier as well as to the cracksman or 
sneak thief. 

As to the relative amount of remuneration which 
mental and physical effort should control, where both 
are productively employed, the present practice seems 
to be based on dubious grounds, to say the least. We 
assume that mental effort is worthy of greater remuner- 
ation than is physical, but if required to give a valid 
reason for such assumption, we would not find our way 
at all easy. Mental ability is its own reward to a greater 
extent than is physical, and mental effort cannot claim 
remuneration on the ground of being at all exceptional. 
A railroad president collects fifty thousand dollars per 
year for his services, because he controls stock enough 
to vote him that salary, not because his services arc; 
worth that much to the community which the railway 
serves. They may be positively detrimental. It is 
unnecessary to mention names or instances. Look at 
the railway history of the last thirty years. And as 
for exceptional talent, it is no exaggeration to say that 
there are ten thousand men in the United States to-day, 
each drawing a salary under five thousand per year, 
who would make railway presidents as able and reliable 
in every respect as any now drawing fifteen to fifty 
thousand dollars for such services. Judging from re- 
sults, railway officials, notwithstanding the princely 
salaries, have been criminally negligent of their trusts, 
or else criminally inefficient. Railroads make a poorer 
showing than any other class of business enterprises, 
having had one-third of the whole mileage in the hands 
of receivers at once. 

A lawyer gets one hundred thousand dollars for a 
case, and his whole effort has been toward oppressing 
the toilers from the product of whose toil he is remu- 
nerated. The large fee is usually for unscrupulousness. 
There are a thousand others, w r hose yearly incomes are 
not one-twentieth of that sum, as learned in the law as 
he. Indeed, it is an open question whether if every 



116 A BREED OF BARREN METAL 

lawyer in the United States were disbarred to-day and 
turned to useful occupations, and justice were adminis- 
tered on man's sense of equity and a common sense in- 
terpretation of the law, the cause of real justice would 
not be furthered, and the community be in all respects 
better off. We would certainly have a less complicated 
and more comprehensible system of law. Any man 
with a fair English education and. a degree of common 
sense could draft laws more intelligible to the average 
citizen, who is supposed to understand them, and infi- 
nitely more terse than the product of the lawyer. With- 
out the quibbling lawyer these laws would discover 
little ambiguity, common sense could easily find the in- 
tention and interpret in that light. The effort of the 
lawyer seems to be to make laws, as lawmaker, which 
he, as a lawyer, can pervert for the benefit of his client, 
whether that client be seeking that which of right be- 
longs to him, or seeking to despoil another. Lawyers 
have meshed the laws into such a Chinese puzzle that 
no one pretends to know a tithe of the law of the land, 
although there is an agreeable fiction that no one is 
ignorant of the law. 

I do not mean to insinuate that lawyers as a class 
are naturally less honest or more obtuse than other 
men, but I do affirm that most of them are striking in- 
stances of good talent perverted to unholy purposes. 
They are a necessary product of a vicious industrial sys- 
tem and thrive on the reprisal element of modern 
commerce. From the standpoint of the toiler they are 
certainly entitled to no more remuneration than that 
claimed by the average worker. 

The doctor with enormous income is as often the 
charlatan whose profession of empirics and experiment 
applied to questions of life and death he uses as a 
means of extorting money, as he is ,an honest, earnest 
worker, trying to learn the laws of health and to im- 
press them on his patient. And the learned doctors who 
get less than five thousand per year are twice as numer- 
ous as those whose eye for extortion and dishonesty 
gives them greater incomes. Strip medicine of its pre- 
tense, of its juggling with the sacred right of life. Let 



A BREED OF BARREN METAL 117 

doctors tell the truth and throw away drugs which the 
most learned will not positively assert to be of benefit 
to the sick, and the twenty thousand per year practices 
would be so few that they might be ignored, and the 
number of doctors would be reduced by one-half, with 
infinite benefit to the health and* pockets of the com- 
munity. On the basis of a return for what it receives, 
no community can afford to pay a doctor twenty thou- 
sand per year, unless it be for his usefulness in getting 
rid of undesirable characters, and then it should induce 
him to take his own medicine. 

Neither medical nor legal fees should be so high that 
the best talent, when needed, may not be at the com- 
mand of the humblest, and this is clearly impossible 
where the services of a professional man for a few hours' 
work is greater than a toiler's salary for a year. Highly 
paid lawyers and doctors simply share the unearned 
incomes wrung by capitalists from industrial workers 
through interest-taking, and if these unearned incomes 
were done away with the lawyer or the doctor would 
be obliged to give his services for what they are worth. 
I fear that some of them would have very slight re- 
muneration. 

Literary men hardly ever get very unusual salaries. 
Where they make an exceptional amount it; is usually 
as business men. It would be difficult to measure their 
just remuneration. If, as is often assumed, they had a 
monopoly of the thought which they express, their re- 
muneration should be very large, indeed. But the fact 
is, that the burning thoughts which they express so 
well were the common property of a thousand brains 
before their accredited authors ever put pen to paper. 
If they had not expressed them, others would. Thoughts 
are a product of community civilization as truly as land 
values are. Shakespeare's age had a hundred lesser 
Shakespeares who might have been greater had Shake- 
speare never been. Has the reader never had a thought 
which he imagined all his own until on looking over 
printed pages he found that thought expressed better 
than he could have expressed it, and already given to 
the world? I think it is the experience of every one 



118 A BREED OF BARREN METAL 

who thinks at all. Indeed, literary glory depends more en 
the manner of expressing than on the ability to cod jure 
up great thoughts. Back of the whole race of throbbing, 
sentient beings there seems a great volume of knowl- 
edge which kindly nature turns over page by page be- 
fore the eyes of all who care to read. It can be read 
only when the page is turned, then it is common prop- 
erty. There is some great world spirit sitting on that 
throne of knowledge which will allow no one to be a 
miser with his thoughts. If you would keep them, use 
them first. As great thoughts depend on no one person 
in particular, no one can claim any especial remunera- 
tion for great thoughts. 

The enormous prices paid for works of art are a relic 
of the barbaric spirit, still strong in the child, to want- 
that which others cannot have, instead of enjoying it 
all the more because others enjoy it. It is indulged by 
the possession of unearned incomes founded on interest, 
and would be destroyed with the destruction of these 
interests. Those thousands of dollars are not for the 
artistic ability displayed, but to gratify a barbaric 
pride. A people can afford nothing which all may not 
enjoy. 

All great devices are invented by degrees, so much 
so that they are the common property of several before 
they ever see the light. Like the infant learning to 
walk, man's steps into the field of knowledge are feeble 
and tottering He cannot leave the bench of present 
knowledge, but must drag it with him as his support 
in fields unknown. If Fulton had not invented the 
steamboat, some one else would. Stephenson did but 
a little more than some others toward perfecting what 
was initiated by a Greek or Egyptian, who can say 
which Greek? There was a world of knowledge upon 
the history of civilization in one of the railway exhibits 
at the World's Fair, and it said in thunder tones, how 
insignificant is the influence of any one man ! Edison 
has patented what a hundred others were toiling with 
as well as he. Those who are known as the inventors of 
this or that machine are entitled to no very especial 
remuneration. 



A BREED OF BARREN METAL 119 

It is the same with great discov eries in science. The 
observations of the Chaldean shepherds were necessary 
to the truths enunciated by Laplace. 

The very large pay of the so-called histrionic artist or 
concert singer is founded largely on the fashionable 
extravagance of those in control of unearned incomes. 
It is the same principle as that which governs the price 
of works of art. 

Who can say who invented printing? Who wrote the 
books of Moses or the Zend A vesta? Who wrote the poems 
of Hesiod? Who were the pioneers in Anglo-Saxon lit- 
erature? Who really gave the laws of Solon? Who 
first discovered America? Who furnished the ideas 
for Hamlet or the Divine Comedy? Who will answer? 
The more the person questioned knows about these 
things, the less likely he is to be dogmatic. The great 
individual is but a bubble on the surface of the mighty 
current of humanity, a bubble sent up by a trifling for- 
tuity. He has as little to do with the headlong course 
and sweeping might of that current as the chip on the 
broad Mississippi's breast has to do with directing the 
course of the great father of waters. He simply shows 
whither it sweeps. While none are overmastering, none 
can, on the principle of reward for services, claim an 
overmastering prize. To the swiftest is the race, but 
the rules of the course should be the greatest good to 
the greatest number. He who reaches the goal a second 
ahead of a thousand others, should not get a prize us 
large as the thousand, especially when his gain is due 
to a better start. 

While talents differ widely, from the highest to the 
lowest, as the giant towers above the dwarf, no one has 
talents far above all of his fellow men. The giant 
touches shoulders with other giants. No man is then 
entitled to any very exceptional remuneration on the 
score of his services to other men. No man ever earned 
fifty thousand per year, not to speak of saving from 
twenty to fifty times that amount. There never was a 
man on earth, and never will be, whose services might 
not have been dispensed with without making the earth 
perceptibly poorer in any respect; and some of the 



120 A BREED OF BARREN METAL 

most valuable have received scarcely any material re- 
muneration. The vast difference in the remuneration 
of men depends on the power of some to control the 
results of others' toil, and that power depends on rent 
and interest. Men have long since abandoned the idea 
of getting rich otherwise than by appropriating what 
rightfully belongs to others. 

Ability is the great factor in production and ability 
should receive the reward, wisely remarks the apologist. 
What ability? Ability to appropriate or to produce? 
As we have seen, ability does not differ widely in 
tangible material production. As we have seen, inven- 
tions of great effectiveness are dependent on no one 
man. As we have seen, talent is not rare; what any 
one man has accomplished, thousands of others might 
and would have accomplished. Otherwise the place of 
no important personage could be filled, but they are 
filled by the hundred every day and the world does not 
see the difference. But as we have seen, it is not in- 
ventive power, nor genius in production, nor great 
merit of any sort which receives the material prizes. 
It is low, stealthy cunning and unscrupulousness, 
largely. 

If ability to serve were the measure of reward many 
men in high places would now be living very frugal 
lives. The ability which is exhibited for an important 
consideration is not rare. Any one of twenty states in 
the Union could supply a president, cabinet, congress 
and supreme court, who, with as much training, would 
be as efficient as our present government force and take 
no man who earned over five thousand dollars per year 
either. The fact is that the highest salaried officers of 
government or corporations are merely figure-heads so 
far as the practical business is concerned. The presi- 
dent's labor is ended when he selects a* cabinet. If it 
is not, the country usually realizes that fact to its ever- 
lasting sorrow. No matter how able, the president 
cannot have knowledge of details in all branches, suffi- 
cient to enable him to make an intelligent decision on 
the practical questions which come before him, and he 
must take the judgment of some one whose efforts are 



A BREED OF BARREN METAL 121 

confined to a narrower field. The people decide the 
principle which is to be applied, so the chief executive 
is only a sort of button for under officers to touch in 
carrying on the affairs of government. The same is true 
of all officers of large corporations. They must depend 
for their action on the judgment of lawyers, promoters, 
confidential clerks and managers. And it is no reflec- 
tion on the officer to say this. From his position he 
must necessarily be a figure-head, except, perhaps, in his 
judgment of the men about him, which he has every 
opportunity to know. Hence the high positions require 
less real ability than those considered less important. 
On the score of required ability the confidential clerk, 
attorney or promoter, the cabinet or assistant cabinet 
officer should have larger income than the head of the 
corporation or the government, biit such is not the case. 

Ability has nothing to do with remuneration; remu- 
neration or income depends on one's power to appropriate 
and this depends on interest and rent-taking. 

We often hear it said by apologists for plutocratic 
privileges, that this or that income does not come out 
of the people's pockets and the people have no cause 
for complaint about it. People, they say, have a right 
to do what they please with their own. This is soph- 
istry of the rankest sort. People often have not an 
ethical right to do what they please with what is 
legally their own, for the reason that it is not ethically 
their own. And as for the people having no interest 
in the payment of big salaries to railway and other cor- 
poration officers, they have just as much interest in 
this as in the manner in which taxes are disbursed. 
Wealth does not create itself, then it is created by pro- 
ductive workers, every dollar's worth of it. Productive 
workers, then, have the right to demand that every 
dollar of it brings them a return. If a railroad pays 
exorbitant salaries or scatters passes broadcast, the 
patrons of that railway, ultimately the productive toil- 
ers, have to bear the extravagance in increased rates. 
If speculators parallel linas where commerce does not 
demand it, keeping up the extra line is a tax on pro- 
ducers. The average citizen has just as much interest 



122 A BREED OF BARREN METAL 

in seeing railways run economically as he has in seeing 
the government administered with economy. In fact 
every business in the country affects every other and 
any extravagance in any is a loss to every toiling citizen. 
In society, man is bound to his fellow man and has 
obligations to fulfill to him whether he likes it or not. 
If I am a boot : manufacturer and pay a superintendent 
an exorbitant salary, cutting the wages of my workers 
in order that I may do so, I primarily wrong my em- 
ployes and indirectly wrong every productive laborer 
in the countr} T . I attack the financial interests of all 
toiling citizens. If my employes had what they earned 
they would take more of the product of other concerns - 
working in their class and make their wages better. 

To be sure, when one has produced a thing it is his 
own. He may then do what he likes with it without 
affecting any one, but he must see that he has produced 
it himself or given its producers an adequate return for 
it before he can assume to do with it as he pleases. If 
one Avants to become irresponsible to his fellow man 
let him go on a desert island where no being exists, 
and then he is irresponsible only until some one else 
comes. When another claimant to the island arrives, 
some understanding as to joint possession must be en- 
tered into and the men become immediately inter-re- 
sponsible. And even as to wealth, it is a trust, no man 
possessing a title other than for use, present or future. 



CHAPTER XVIII. 

Worka Boon— Involuntary idleness— Extraordinary expenses incurred in times 
of financial distress — Why they seem to help the condition of the country. 

The "curse of humanity" is eagerly sought for by thou- 
sands. 

Why is work looked upon as a boon, and like Mac- 
beth 's power of prayer, he who has most need of em- 
ployment, is left without it? It is evidently because he 
has not the means of applying his labor to natural op- 
portunities, or the natural opportunities themselves 
are withheld from him. While he remains part of 
civilized society, either will deprive him of his ability 
to work. Monopolize the wealth which has already 
been produced and you can control further production, 
dictating terms on which the wealth may be used or 
preventing its use at all. Wealth is monopolized by 
controlling the surplus, and this is made possible by 
rent and interest-taking. In times of panic menwho con- 
trol capital do not wish to risk it in industry. They 
hoard it and the laborers remain idle and starve. Interest 
and rent-taking bring about panic, and hence the distress 
of the laborer. If wealth remained in the hands of the 
toiler, he would certainly employ himself when he 
needed employment. Rent and interest take it from 
him. 

When a business man is in financial trouble, he lops 
off every expense possible and lives closely until he gets 
out of his difficulty. He would not think of undertak- 
ing a new building or incurring any extraordinary ex- 
pense, while pressed for money. Yet, at times of panic 
and depression, the most extravagant schemes of pub- 
lic improvement are undertaken, entailing great 
additional expense, and they actually help the condi- 

123 



124 A BREED OF BARREN METAL 

tion of the country. This seeming paradox is explained 
by the fact that a portion of the hoarded capital which 
was withheld from laborers is released and the laborer 
is given an opportunity to work and create an effective 
demand for the wealth tied up by the hoarding of other 
wealth or its currency representative. The embargo 
of the rent and interest collector is raised. If wealth 
were not in the wrong hands, care would be taken to 
place it first in the most remunerative employment,and 
extraordinary improvements would naturally be left to 
prosperous times. While a few men have, through rent 
and interest-taking, power over the fixed capital of the 
country, they will hoard it when in danger and leave 
the bulk of laborers idle and starving, and all business 
paralyzed. Capital should be in the hands of those who 
must use it to earn their daily bread. 



CHAPTER XIX. 

War and Prosperity— Their connection explained— Historical testimony— The 
war spirit and slavery — Revolution. 

Man versus Mammon. 

Wak, the great destroyer of life and treasure, often 
ushers in new eras of national prosperity. It is certainly 
not the destruction of property which has benefited the 
nation, for that makes everybody poorer. It is merely 
because of its leveling propensities. The prosperity of 
a nation depends on the prosperity of her common peo- 
ple. A .destructive war brings from their hiding places 
the hoards of the wealthy. It decentralizes wealth. 

The immense destruction calls for immense produc- 
tion, so that all capital must be employed. The scarcity 
of laborers makes it necessary for capitalists to pay 
higher wages, i. e., give the laborer a greater part of 
the wealth which he produces. He therefore consumes 
more and is a better customer to other productive 
workers. Business is active, times good. The capitalist 
is obliged to disgorge and allow his wealth to be used 
in production lest he lose all. He cannot exact of toil- 
ers such heavy tribute. 

History is full of testimony as to the salutary effect 
of wars on industrial prosperity. According to Ramsey, 
the common people were unusually prosperous during 
the Revolutionary war. We still hear laborers speak 
of the "good times" during the war of the Rebellion. 
The French of the revolutionary period held monarch- 
ical Europe back with one hand and at the same time 
gave a better living to the common people than they 
had known for centuries. They were prosperous be- 
cause relieved of the tribute to the usurer and landlord. 

It is a grim fact in the history of the world that un- 

125 



126 A BREED OP BARREN METAL 

warlike nations become peopled by races of slaves. 
The more robust the war spirit, other things being 
equal, the freer and more prosperous the nation. In- 
stance a comparison between the nations of Europe and 
those of China* and the east. This fact is inexplicable 
except on one hypothesis, for war is in itself destruc- 
tive, and the military rule inimical to liberty. But 
the explanation is that war prevents the accumulation 
of wealth in the hands of a caste, it is a great leveler 
and equalizer. It is in that way a heroic remedy for 
a terrible malady. Of course, I refer to wars which stir 
up the whole population. 

' It is the wealth which is absolutely secure in the 
same hands which is dangerous to the liberties of a 
country. Show me a nation where revolution is .un- 
known, and I will show you a nation of serfs. I can 
go further and show that revolution and serfdom usu- 
ally appear in inverse ratio. This does not go to prove 
that revolution is in any way desirable, but that it is 
more so than the desperate malady which it is intended 
to cure. Wealth must be decentralized by some means. 
England, at the van of progress, is a country where 
the revolution is usually silent and seemingly infre- 
quent. Her active spirit of colonization and the open- 
ing up of new fields of industry to her people, as well 
as the broad commercial spirit of her sons, have served 
to neutralize the tendency to crystallization in her 
economic circles and to preserve the industrial and 
political liberty of the masses. Shut England up by 
herself and let her inhabitants prey upon one another 
only, as the inhabitants of other nations are accustomed 
to do, and the country would be no exception to the 
proposition that some influence, disturbing .to vast 
centralization of wealth, is needed to preserve the lib- 
erties of a people. The opening of a new continent, of 
itself, brings about a revolution. In new countries, 
class-making must begin anew. The spirit of equality 
which is inspired by the reaction of the new nations 
upon the old, acts as a leveler, and puts off the pluto- 
cratic crisis. 



CHAPTER XX. 

Wealth and National Stability— Why great wealth has proved destructive to 
great nations — The basis of national integrity — Wealth and the means of get- 
ting it. 

A law-sanctioned wrong to the humblest citizen, is a na- 
tional wrong. 

Why is it that the accumulation of wealth has here- 
tofore proved the destruction of the greatest nations? 
Up to a certain limit, wealth is power. There is no 
reason why it should enervate a man to supply his legit- 
imate wants. Leisure and refinement should give man 
greater control over himself, teach him better how to 
live, to govern, to secure stability to the state. Yet we 
have Egypt and Assyria and Rome and Carthage and 
Greece to testify to the fact that great accumulations 
of wealth in the hands of a few of a country's citizens 
means moral, political and industrial decay. We may 
yet learn the lesson from a more modern tutor. 

On the theory that each man is entitled to what he 
can extort, this fact of the destructive power of wealth 
is utterly inexplicable. It revolts our common sense 
as well as our sense of logic, to assume that what is 
right can lead to a radically evil result. If unlimited 
appropriation is right, the civilization founded on it 
should be righteous and enduring. If such has not been 
the result, then unlimited appropriation cannot be right. 
That is where the explanation lies. 

The prosperity of a nation depends on the prosperity 
of all its people. If any considerable portion of the 
inhabitants of a nation are ground down, the nation 
itself will soon feel their misery. The nations of old, 
like the nations of to-day, permitted interest and rent- 
taking. The wealth of the nations accumulated in the 
hands of the few. The laborers of the nations became 

127 



128 A BREED OF BARREN METAL 

poverty-stricken. Poverty, abject and continued, bred 
vice, lawlessness, decay. Men became hungry, then 
craven, then brutal, and lost all idea of justice. Like 
the hungry wolf, the gnawing wants of the animal alone 
were felt, and no method or means which would supply 
that want was scorned. Men became slaves, women 
strumpets. 

On the other hand the means used in accumulating 
enormous wealth drove from the soul of the wealthy all 
idea of right. They began to doubt that there was any 
such thing as right in the world. The idle, useless lei- 
sure which they obtained through their wealth oppressed 
them and they plunged from one excess to another. 
They had the means to gratify every whim. They had 
no need to resist any self-indulgence. They soon be- 
came unable to resist it. Producers became worthless, 
their masters more worthless. A state can no more be 
upheld without citizens, than a great building can be 
constructed of nrnd bricks. The state crumpled, or fell 
a prey to stronger peoples whom wealth had not cor- 
rupted. 

While the causes remain, the effects are sure to fol- 
low. We are in this great republic following in the 
footsteps of Roman luxury. We are undermining the 
integrity of citizens by the extremes of poverty and 
wealth, and if we keep on we shall pay the penalty. 
Give to every man what belongs to him and none will 
have wealth to grovel in, none will feel the imbruting 
influences of poverty and want. 



CHAPTER XXL 

The Yeomen of America— The passing of the independent farmer — The change 
in the character of the agricultural class— Causes — A peasantry being 
formed — Danger to institutions — How it may be avoided. 

"But a bold peasantry, its country's pride, 
When once destroyed can never be supplied." 

The yeoman of America, the independent farmer, is 
slowly passing. His toil is unprofitable as unceasing. 
He is dropping behind in the march of progress. He 
has become the jest of the narrow, ignorant, shallow 
minion of plutocracy, but a warning to all thinking 
people with the interest of their country at heart. 

It is true that we have passed, to some extent, from 
an agricultural to a manufacturing population, but 
this does not account for the abandoned or dilapidated 
farm. There are millions more mouths to be fed. The 
demand for farm produce has not fallen off, yet farming 
is unprofitable. The margin of profits in agricultural 
pursuits has dwindled to zero, and the product of the 
farmer is not now sufficient to reward the toil of the 
producer. I have already given an instance, but I will 
make it more specific. On well known business princi- 
ples, agriculture cannot long continue to pay much less 
in one portion of the country than in another. The busi- 
ness will soon be abandoned where it is least profit- 
able. A typical instance in one section of the country 
is largely typical of the situation in the whole country. 
To simplify the matter, we will assume that the farmer 
owns his farm and works it with his own hands. A 
man with a good team can work a wheat farm of fifty 
acres, with the aid of an additional hand for about 
thirty days at harvest time. This will give employ- 
ment to the man and team for the whole year, and 

129 



130 A BREED OF BARREN METAL 

rather arduous employment it will be. A farm of fifty 
acres, in Minnesota, for instance, within one hundred 
and fifty miles of Minneapolis, the great flouring cen- 
ter, is worth, with buildings and improvements, about 
two thousand dollars The team and machinery suffi- 
cient to enable one man to work that farm is worth, 
or was during the decade from 1880 to 1890, about five 
hundred dollars. The land and capital employed then 
would be worth about twenty-five hundred dollars, 
something less than half the value being land and half 
wealth. The expense of working and maintaining that 
farm for a year would be substantially as follows: 
Heed, $45; feed for team, $100; deterioration of im- 
provements, $40; taxes (local, state and school), $25; 
threshing, $50; insurance, $5; hire of hand with board 
(thirty days during harvest Beason), $40, making a total 
of $305, besides the labor of the farmer. 

The very best land with the very best cultivation 
will not average, year after year, more than twenty 
hushels to the acre, but I take this return, as it will 
be equal to any crop the farmer may raise and in that 
way represent the case* of the mixed farmer also. The 
census figures give an average yield in different years 
of from about thirteen to less than fifteen bushels to 
the acre. Wheat requires less labor than any other 
crop. Placing the yield at one thousand bushels or 
twenty bushels to the acre would give the farmer a 
gross return of six hundred dollars, or a net income or 
wage of two hundred and ninety-five dollars. This he 
must live on and feed, clothe and educate his children. 
And this is the wage of the prosperous farmer, the envy 
of his fellow farmers. 

If the farmer of the northwest could be sure of twenty 
bushels of wheat to the acre and sixty cents per bushel 
therefor, or a crop of mixed product equal to that, we 
should hear little murmur of hard times. Yet what a 
pittance is two hundred and ninety dollars per year 
with which to raise a family, who are supposed to take 
their place as intelligent American citizens and to direct 
the destinies of the nation! 
. To be sure, the most common sort of farming is mixed 



A BREED OF BARREN METAL 131 

farming, where men, women and children engage in 
the toil, but the small farmer's income is scarcely ever 
more than is indicated above. 

When you put the farmer, then, on a leased farm or 
require him to meet a mortgage upon his own, his liv- 
ing falls below the line of respectability. He and his 
family are required to try to exist on one hundred and 
fifty or two hundred dollars per year. 

The American citizen will refuse to do this. He 
fails, goes to the cities and swells the crowd constantly 
surging against the line of starvation. The peasant 
farmer from Europe takes the farm, and our yeomanry 
is turned into a poverty-stricken peasantry with tradi- 
tions of kings and slavery. The Americans who remain 
soon reach the same condition. There are but two ways 
left: either to fall to the scale of living of the European 
peasantry, or let the debt-burdened farm go. 

The secret of the whole trouble lies in interest-taking 

If the farmer is not paying interest on a farm mort- 
gage, he is paying interest on the bonds of the railways 
which haul his wheat, and probably besides princely 
salaries, dividends and speculative profits. He is pay- 
ing capital profits on a hundred tilings which he is 
obliged to use and capital profits and speculative charges 
on the grain he sells. Or rather,the consumer is paying 
these charges without giving the producing farmer any 
benefit. 

Farm life is lonely enough without adding to it the 
gloom of want. There is no toil so exacting, no occu- 
pation has such a monotonous round. It is no wonder 
that the youth fly from it and that the aged become 
bent and hard and grasping and narrow, a beautiful 
subject for the plutocratic tool, too hair-brained to see 
the tragedy of what he caricatures. More than likely 
he has escaped from the dull and awful grind to turn 
traitor and spurn the stepping stones to his success, if 
he has any. 

If the American farmer is not to pass to tenancy 
through the gate of foreclosure or bankruptcy, he must 
be relieved of direct or indirect interest charges. 

The line which divides the tenant farmer of America 



182 A BREED OF BARREN METAL 

from the European peasant is fast being obliterated, 
and if America would secure the integrity and independ- 
ence of a vast body of her citizens, she must see to it 
that the burden of the farmer is lightened. Garrison 
said that you could not enslave one human being with- 
out menacing the liberties of the world. You cannot 
degrade one human being without degrading the whole 
nation. 



CHAPTER XXII. 

Mortgage Indebtedness — Its rapid increase— Is it an evidence of prosperity? — 
Arguments to that effect analyzed — Debts and assets — Increase in wealth as a 
whole not necessarily a sign of national prosperity — A specimen of plutocratic 
reasoning — Figures as to the relation of farm-mortgage debt to prosperity — 
Value of product, not of capital, the measure of debt-paying power — Census 
figures analyzed — The conclusion— Mortgage debts in general — General con- 
clusions. 

Debts are never assets. 

The magnitude and rapidity of increase of the mort- 
gage indebtedness of the country is little short of amaz- 
ing. During the nine years preceding January 1, 1890, 
the mortgage debt of the country increased more than 
one hundred and fifty per cent, and the percentage of 
increase of mortgage indebtedness contracted in 1890, 
over the indebtedness contracted in 1880, was more 
than one hundred and forty per cent. In 1889 the mort- 
gage indebtedness of the United States was six billions 
nineteen millions and one-half. At the rate of increase 
which obtained from 1880 to. 1890, we would now be 
paying interest on a mortgage indebtedness of more 
than ten billions. 

I am aware that a certain wise economist pronounces 
mortgage indebtedness a sign of prosperity. I would 
have more regard for his sincerity if I had less for his 
intellect. It would be difficult to convince a gentleman 
of Mr. Atkinson's experience as a hard-headed business 
man, that debts are assets, or that the larger the debts 
of a firm, relative to its assets, the better their financial 
standing. If he were to find by consultation with his 
"Bradstreet" that a certain firm last year had debts to 
the amount of but one hundred thousand dollars, and 
assets to the amount of five hundred thousand, and this 
year had debts to the amount of two hundred and fifty 
thousand, while their assets represented but five hun- 

133 



134 A BREED OP BARREN METAL 

dred and fifty thousand, he would say: "That firm has 
lost one hundred thousand dollars within twelve months; 
they will bear watching." The nation is in just that 
condition. Debts have increased much more rapidly 
proportionately than wealth. 

Indeed, in Mr. Atkinson's own article, founded on 
the assumption that debts are assets, he moves heaven 
and earth to disprove the proposition which he lays 
down on starting out, If debts are a sign of prosper- 
ity, the prosperity of the American agriculturist 
should be measured by his indebtedness. Yet Mr. At- 
kinson asserts first that debts are a sign of prosperity, 
then labors to prove, and proves to his own satisfac- 
tion, that the debts of the farming community are rel- 
atively small; then, with amazing inconsequence, 
concludes that the farming community must be pros- 
perous! One of the leaders of plutocratic economic 
science turning two somersaults in logic to reach an a 
priori conclusion and then calling it proof! In trying 
to prove too much, Mr. Atkinson holds himself up as 
the acme of inconsequential ridiculousness. 

Even if farm mortgage debt had not grown so rapidly 
as assets on an average the country over, that fact 
would prove nothing. It does not help the people who 
fail to know that others succeed. While the average 
in figures may show prosperity on the whole, asis.shown 
in the nation by the increase of national wealth, the 
great majority may be becoming poorer and poorer. 
There may be much suffering where wealth as a whole 
is increasing. No one tries to deny that as a nation 
we are growing somewhat richer. The trouble is that 
enormous sums to the credit of the few, balance the 
small but fatal losses of the many. 

And this is the fact so far as farmers are concerned. 

Let statisticians say what they may, there is distress 
in farming communities to-day. The fact can be veri- 
fied by any one who will take the trouble to travel 
through the rural districts of any portion of the country, 
and observe and listen. Men do not grumble and make 
themselves miserable for nothing. Unpainted, dilap- 
idated barns, tumble-down houses, and fences out of re- 



A BREED OF BARREN METAL 185 

pair; rags, lack of cash, dull, disheartened faces tell 
more distress than figures ever. can, especially when 
manipulated to deceive. 

Atkinson reasons that because a certain number of 
present farmers came to this country a number of years 
ago with a certain sum of money and have now a greater 
sum, they made that money by borrowing on mort- 
gage security, and farming with the capital borrowed. 
What a ridiculous string of inconsequence! To give 
any color of plausibility to his contention he would 
have to show: (1), that they lived on farms ever since 
they came to this country; (2), that all the money 
which they made was made by working their farms and 
not by going to pine woods, to cities or mines, while 
crops were growing or after they were gathered, as so 
many poor farmers in Michigan, Minnesota and Wis- 
consin were obliged to do; (3), that the mortgages which 
they are now charged with were the bases of their start 
in farming; (4), that it was by the use of borrowed 
money, and not in spite of it, that they attained their 
measure of prosperity. But Atkinson does not trouble 
about such trifles as logical sequence in his arguments 
on "economics." He has gone beyond that, he is an 
"authority." 

Figures will show that the farm mortgage indebted- 
ness is accountable for depression and failure in the 
farming business. According to the statements of Car- 
roll D. Wright in a recent census bulletin, the debt on 
acres and untaxed mines is equal to twelve and two- 
thirds per cent of their value. (What untaxed mines 
have to do with the calculation he does notmake clear. ) 
This would make the value of acres and improvements 
over seventeen billions, a valuation which is not borne 
out by the same gentleman's figures on farm property. 
If our worthy statistician wanted to give something 
valuable why did he jumble mines and farms together 
and separate farms and lots? We must then take his 
figures of amount of mortgage indebtedness on acre 
property and compare it with the value of farm real 
estate. This value is given by Carroll D. Wright as 
thirteen and one-quarter billions in 1890. The debt 



136 A BREED OF BARREN METAL 

upon it (all figures in round numbers) is two billions 
two hundred nine millions of dollars. On this basis the 
mortgage debt on farms would be seventeen and one- 
half per cent. The total gross product of the farms of 
the United States in 1890, as given by the same author- 
ity, was two billions four hundred and sixty millions 
of dollars. The net rate of interest on this mortgage 
debt was seven and one-half per cent, and the gross 
rate, including expenses of loan, was not less than nine 
per cent per annum. This would make the interest 
charge on the mortgage indebtedness on farm real es- 
tate alone more than one hundred ninety-eight millions 
per annum, or more than eight per cent of the gross 
product of agricultural pursuits for one year. And this 
does not take account of the fact that some farmers pay 
no interest charges, so that those who do pay, must pay 
more than eight per cent. 

That is to say that the agricultural industries which 
employ, according to Mr. Wright, a capital of upwards 
of sixteen billions, including land values, and get a gross 
yearly return of two billions four hundred and sixty 
thousand dollars or fifteen and three-eighths per cent 
of the capital invested, are required to pay a fixed 
yearly charge of eight per cent of the gross product, 
while manufacturing industries with a capital of six 
and one-half billions and a yearly product of nine and 
one-half billions, cannot pay interest, rent and capital 
profits to the extent of ten per cent. Yet persons en- 
gaged in agricultural pursuits are comparatively pros- 
perous! This is the stuff which Atkinson gives to an 
intelligent community, and which our compiler of 
"facts" for Uncle Sam, takes up and retails. That the 
business returning one-ninth of the gross product per 
annum as compared with capital invested, can afford a 
fixed charge equal to the margin of profits of the busi- 
ness nine times as profitable. Indeed, if we take Mr. 
Atkinson's figures on the margin of profits, even manu- 
facturers with their relatively large return, could not 
begin to pay the fixed charges which the agriculturists 
of the country are called upon to pay. And we saw 
above that in farming, the margin of profits is really 



A BREED OF BARREN METAL 187 

a negative quantity, without a cent of rent or interest 
to contend with. 

But Mr. Wright goes further. He says that mortgage 
debts are but one-fourth of the value which they might 
attain without affecting the rate of interest, and there- 
fore, he infers, the prosperity of the farming commu- 
nity. 

Let us see. If the mortgage charge on acre property 
were increased four fold, even at a gross rate of eight 
per cent, which would be really much below the actual, 
the yearly interest charga upon agricultural real prop- 
erty would be over seven hundred millions of dollars or 
twenty-nine per cent of the gross yearly product of ag- 
riculture. It is needless to say that that business was 
never undertaken which could meet such fixed charges, 
let alone the business of agriculture, which by Mr. 
Wright's own figures is the most poorly paying business 
in the United States. The only considerable business 
wnich approaches it in disparity between the capital 
invested and the yearly return, is railroading, and one- 
third of the railroads are in the hands of receivers. 
Then the railroad capital represents so much water that. 
it is not a fair comparison. Again, the farm-mortgage 
debt of 1889 was seventy per cent more than that of 
1880, while in that decade farm product increased but 
eleven per cent. 

I am convinced from observation in half a dozen 
typical states, and inquiry in others, that the figures on 
farm real estate and improvements, as well as on in- 
crease in value for the last decade, are much too high. 
If farm land has increased in value since 1886, farmers 
have failed to find it out. The increase in value from 
1880 to 1886, except in land settled in the last decade, 
has been largely counteracted within the last half dozen 
years Much land has been abandoned and much 
will sell for less than it would bring ten years 
ago. But we will accept the "facts" of our "econ- 
omists" and allow them to aid us in overthrowing their 
ridiculous conclusions. The increase in the value of 
land settled since 1880 is irrelevant in showing the busi- 
ness standing of farmers in 1890, as compared with 
1880. 



138 A BREED OF BARREN METAL 

Whether there is a margin between the value of the 
property mortgaged and the amount of the mortgage 
has nothing to do directly with whether the business 
can bear the burden and still be profitable. It is the 
relation of the interest charge to the annual product, 
or what is left of it after paying necessary expenses of 
production, which must decide as to whether this or 
that business can bear its load of debt. To be sure, the 
comparative size of the debt is now an indication of what 
the interest charge is, but were no interest charged the 
whole capital might be borrowed without affecting the 
prosperity of the business. While the lender may safely 
base his estimates on the value of the security, the 
borrower must base his on the margin of profits. 

As to the question whether the agricultural product 
is sufficient to bear the present interest charge and still 
leave enough to pay the necessary expenses of produc- 
tion, there can be but one conclusion : that it is not. 
The figures and common sense of the matter agree with 
observed facts. Agriculture is overburdened and un- 
profitable. There is no miracle by which the least pay- 
ing business is most prosperous in a period of general 
distress.* 

But we will take the mortgage debts as a whole. 
While the prosperity of the farmer is important, it is 
no more so than that of any other honest toiler. Taken 
as a whole, we see that while our assets have increased 
less than fifty per cent in nine years, our fixed debts 
have increased more than one hundred and fifty-six per 
cent. Any one with ordinary common sense, not to 
speak of economic knowledge, who can find a sign of 
prosperity in this, is more worthy of congratulation on 
his optimism than on his intellectual powers. 

But while this ground was being lost have we not 
heard prosperity cried from the housetops? Certainly, 
the capitalist was prosperous, he was increasing his 
income at an unheard-of rate and his voice is loudest. 

*Consider for a moment that according to census figures the 43 l / 2 millions who 
live outside of cities subsist on a gross yearly product of 2,460 million dollars, 
while the 18 millions who live in cities have a gross product of about six billions 
of dollars per year, besides the profits of merchants and the remuneration for 
professional and personal services, and then ask are farmers prosperous? 
Three times too many people are trying to live on farms. 



A BREED OF BARREN METAL 139 

It was the interest charge and the rent tribute that was 
piling up the big aggregate on the Avrong side of the 
ledger. And judging from the relation of the increase 
in indebtedness to the increase of national wealth, all 
of the interest charge did not go to American capitalists, 
either. Nothing except the principle of interest-taking 
can account for a decline in the fortunes of the pro- 
ducing masses, in times of profound peace, vigorous 
effort and abundant rewards. The wealth was certainly 
produced; enough of it to make the whole people pros- 
perous. The increasing mortgage indebtedness must 
then be an index of its distribution between the classes. 
The rich have certainly grown richer. Then it is the 
poor who must have suffered, and they suffered through 
unearned incomes of the rich. For nothing earned by 
anyone can make another poorer. 

We have thus seen that the taking of rents and in- 
terest is amply capable of explaining all of the consid- 
erable disturbances in the industrial and financial 
world. On the same basis we might explain the growth 
of the tenant farmer, the tenant population and slums 
of our cities, and a thousand lesser troubles with which 
we are menaced. We can easily explain on this basis 
the fact that luxury and squalor go hand in hand. 
None of these phenomena can be satisfactorily ex- 
plained on any other theory. Our industrial, including 
our financial system, is based on the taking of interest 
and rents, and if these principles are right, and are ap- 
plied, our system should be faultless. The principles 
are certainly applied, but the system is certainly not 
faultless. Let the plutocratic apologist afford an ade- 
cpiate explanation. It has not yet been done. The 
nearest approach to it is the generality that these troub- 
les are an incident of our civilization. A meaningless 
platitude, unless we show how they are. This I have 
endeavored to do. I have at the same time shown that 
my theory bears the crucial test of truth; i. e., agree- 
ment with observed phenomena. It is in no place out 
of harmony with observed facts. 



CHAPTER XXIII. 

Historical Testimony — The wrong of interest-taking always recognized by 
thinkers— The Mosaic law— Objections — The Greeks— The Romans— The 
mediseval Church— The early Church— Europe of the Middle Ages— Reformers 
and usury— Shakespeare's idea— The Jews and the movements against them— 
Legislation — Pe.nal statutes — Prohibitive statutes— The Statute of Queen Anne — 
France— General conclusions— Objections— The fact of a thing having existed 
no proof of its righteousness. 

"Truth crushed to earth will rise again." 

Persons may pronounce it strange that the world has 
waited until this day and generation to discover the 
evil of interest-taking. The fact is, it has not. Many 
important discoveries have been put off until the nine- 
teenth century, but this is not one. Although the evil 
was detected it was never explained, and hence people 
foolishly came to the conclusion that it was imaginary. 

From the earliest dawn of history, we find the most 
advanced thinkers and law-givers combating usury, 
which term until recently was used to designate the 
taking of all increase. It was fought in every civilized 
state. It was the ruin of more nations than all oiher 
causes put together. 

By the Mosaic law, usury was strictly and unequivo- 
cally forbidden. Deut. XXIII. 19: "Thou shalt not 
lend upon usury to thy brother, usury of victuals, usury 
of money, usury of anything that is lent upon usury." 
This is sweeping enough to meet any case. But in the 
next verse the law-giver goes on: ''To a stranger 
thou mayest lend upon usury, but to thy brother thou 
shalt not lend upon usury, that the Lord thy God may 
bless thee in all that thou settest thy hand to in the 
land whither thou goest to possess it." 

The latter passage is taken by some to break the force 
of the interdict of the former, but it will bear no such 
interpretation. The believing Jew has always consid- 
ered his own people his brothers and all others as differ- 
ent beings, having no rights which a Jew is called upon 

140 



A BREED OF BARREN METAL 141 

to respect. All beside the chosen race are delivered 
into the hands of the elect for their special benefit, and 
are therefore fit subjects for all sorts of extortion. The 
modifying clause is but an index of early Jewish char- 
acter. If it were otherwise it could not belong to a 
people among themselves the most just on earth, to 
others the most unscrupulous and vindictive. 

And it was not the law-givers alone who looked as- 
kance on usury. The populace were in full sympathy 
with these laws. We read in Nehemiah V. 7: "Then 
I consulted with myself, and I rebuked the nobles and 
the rulers and said unto them, Ye exact usury, every 
one of his brother, and I set a great assembly against 
them." And further on he continues: "I likewise and 
my brethren and servants might exact of them money 
and corn; I pray you let us leave off this usury." Still 
further on he says: "Restore the hundredth part of 
the money, the oil and wine which you exact of them." 

The last passage effectually disposes of those who 
hold that the early Jewish law permitted the taking of 
some increase but condemned excessive usury. One 
per cent is as small an increase as we could consider at 
this age of the world, yet the prophet condemned it. 
He was an authoritative interpreter of the law. 

The Jews placed the usurer in the catalogue of the 
hopelessly incorrigible, and in Psalms XV. 5 it enu- 
merates among those who may be appealed to: "He 
that putteth not out his money to usury nor taketh re- 
ward against the innocent; he that doeth these things 
never shall be moved." 

Proverbs says: "He that by usury and unjust gain 
increaseth his substance, he shall gather it for them 
that shall pity the poor." Even the giving of usury is 
condemned by the prophets,as Isaiah says: "The Lord 
maketh the earth empty, as with the taker of usury, so 
with the giver of usury to him." 

Jeremiah looked upon usury as a crime worthy of 
divine visitation, for in his lamentations he says: 
"Woe is me, my mother, that thou hast borne me a man 
of strife and a man of contention to the whole earth; I 
have neither lent on usury nor men have lent to me on 
usury; yet everyone of them doth curse me." 



142 A BREED OF BARREN METAL 

Ezekiel numbers among the just, who shall live: "He 
that hath not given forth upon usury, neither hath 
taken any increase." 

The unjust son is he "that hath given forth upon 
usury and hath taken increase." The just son is he 
that hath not received usury nor increase. 

The wicked city is thus addressed by the prophet: 
"Thou hast taken usury and increase, and thou hast 
greedily gained of thy neighbors by extortion." 

We find running through the whole Bible story of the 
Jews a thread of policy against usury, yet we find thai 
in the days of Nehemiah, the taking of usury on mort- 
gages made in years of short crops had reduced a por- 
tion of the population to slavery, and that he appealed 
1<> the people and abolished usury, even' to the taking 
of a hundredth part. The history of the Jews was like 
that of other nations, but they were wise enough them- 
selves to learn the lessons of history and to abolish the 
principle, the most potent in bringing about internal 
disorders in the state. The constant reference to usury 
in the Old Testament shows it to have been a question 
of the utmost importance among the Jews. 

On the other hand they well understood the power of 
usury in appropriating the substance of other peoples, 
and in all ages have by this means controlled the 
finances of the world. The breed of barren metal act- 
ing through the Rothschilds of to-day is the governing 
power of the civilized world. 

Greece early felt the power of usury. Having experi- 
enced the impossibility of having all their demands sat- 
isfied by the productive activity of the laborers of 
ancient times, and not satisfied with the substantial 
benefits of slavery without its responsibility, the usurers 
of ancient Greece contracted that the persons of their 
debtors should stand as security for debts. In that 
way we find that at the time of Solon the former in- 
dependent proprietors of Athens had lost all of their 
property to the rich and were, to a great extent, en- 
slaved through the taking of usury. Interest-taking 
had given all the power in the state to a small plutoc- 
racy. Solon, or the laws attributed to him, cut the 



A BREED OF BARREN METAL 148 

Gordian knot by canceling all debts founded on the se- 
curity of land or the person of the. debtor,and providing 
against arrearages. 

The history of Sparta is similar to that of Athens. 

While combating the effects of usury, the Greeks did 
not s.eem to understand clearly its ethical status. Aris- 
totle accounted for the wrong of usury by the barren- 
ness of money. Had he gone a step further and ex- 
plained it by the barrenness of all wealth, he would have 
stated a truth that never could have been successfully 
controverted. Those who contend with him try to show- 
that other sorts of wealth are not barren, but their con- 
tention is so thoroughly fallacious, that it is a wonder 
that it ever passed current with disinterested thinkers. 
A flock of sheep left to the mercies of their natural ene- 
mies would not be wealth at all. Neither would they 
increase to any extent. It is the labor of their care 
which keeps them immediately useful for satisfying the 
wants of man, and therefore wealth. In a wild state it 
would be the labor of hunting them which would make 
them available. There is no increase, no wealth with- 
out labor. 

Rome had an experience similar to that of Greece. 
The sturdy yeomen of earlier Rome became, through 
usury, hopelessly in debt to their richer neighbors. The 
legislation of the twelve tables was intended to meet 
this evil, but failed, and the free Roman farmer was 
destroyed. Many of them were reduced to slavery. So 
pitiless were the usurers of Rome that the war tax of 
Senna increased six fold in fourteen years. When Caesar 
came into power, he practically adopted the legislation 
of Solon, but whether not enforced or inadequate, it fi- 
nally failed of success. While in the city of Rome in- 
terest was but four per cent, in the provinces it rose as 
high as twenty-five or thirty per cent. Justinian fixed 
the rate of interest at six per cent and made arrears 
non-collectible, but after *a time, we find the usurers 
ruling and the working people of the nation falling into 
decay. This was the first, as well as the last, step in 
the downfall of the Roman empire. Rome is an exam- 
ple of power without conscience, carrying within it the 



144 A BREED OF BARREN METAL 

seeds of its own destruction. A great nation can no 
more be maintained on wrong than a temple can be 
built on sand. Usury is the greatest industrial wrong 
ever perpetrated. 

Usury was always a crying evil in Rome. Many of 
the great leaders spoke most vigorously against it. It 
was said to be the cause of the greater portion of the 
sedition and discord which perturbed the state. Cicero 
says that when Cato was asked his opinion of usury, 
he made a Yankee-like response by asking the question- 
er's opinion of murder. Seneca and Plutarch are both 
recorded as inveighing against it, and Tacitus notices 
its mischief to the state. To the time when usury lorded 
among thousands, Rome dates its decline. 

At times in Rome the taking of usury was treated as 
an aggravated species of theft and punished accordingly. 
There are instances of the death penalty having been 
inilicted for the taking of usury. This ridiculously 
severe punishment, to be sure, served no useful purpose, 
but rather served to bring about a revulsion in favor of 
the persons against whom it was directed. 

There is but one moral from Roman financial history: 
The Romans failed to destroy the taking of usury and 
usury-taking destroyed Rome. 

There are several reasons why the ancient laws 
against usury were not effective. The money of the 
ancients was founded on a metallic standard entirely, 
and with such a standard it is impossible to prevent 
interest-taking completely. Judges became venal and 
failed to enforce the law or connived at its violation. 
The persons most influential in government were most 
benefited by the taking of usury, and the people who 
were filched from were too ignorant to understand the 
situation or an adequate remedy for the trouble. The 
latter principle is found to be at the bottom of the per- 
petuation of all abuses which have cursed the nations 
of the earth. But more of this hereafter. 

Without going into the history of usury in detail, we 
may say that it has been fought continually down to 
the present time. The community of interest of the 
early Christians strictly forbids it. Of the fathers of 



A BREED OF BARREN METAL 145 

the church, we rind St. Ambrose, St. Augustine and 
Leo the Great vigorously preaching against it. St. Ber- 
nard made an enthusiastic crusade against it. Pope 
Alexander III. joined in condemning it. Luther 
roundly and characteristically scored the usurer. Me- 
lancthon,Beza, Musculus, were all counted among its 
enemies. With few exceptions, churchmen opposed it 
down to the sixteenth century, and for a much longer 
period many of the leaders in church and state were 
unalterably opposed to it. 

So bitter were the English populace against the 
usurer, that from the time of Alfred down to the thir- 
teenth century, detected usurers were often mobbed and 
roughly handled. The statute of Merton, passed 1285, 
was the first formal English law against it, although it 
was an indictable offense at the common law. In the 
latter portion of that century, the Jews were expelled 
from England for their usury-taking propensities. In- 
deed, this trait of the Jews accounted for much of the 
harsh treatment which they received at the hands of 
mediaeval Christians. Shakespeare powerfully sets forth 
this truth in the "Merchant of Venice." It is an excel- 
lent mirror of the times, and Antonio, "who neither 
lends nor borrows by giving nor by taking of excess," 
is a type of the honorable merchant prince of the Mid- 
dle Ages. 

Through all of the writings of the immortal bard we 
rind usury held up t<> public scorn. In "Lear" the 
usurer hanging the cozener, is cited as one of the grim 
ironies of civilization. This is reason and impertinency 
mixed. We find the usurers spoken of in "Timon of 
-Athens" as "bawds between gold and want." In the 
• ; Winter's Tale" we find the usurer spoken of in the 
most contemptible manner. Indeed the works of Shake- 
speare bristle with references to the wrongs of usury. 
Bacon voices the same ideas. 

As the Jews were hated for usury-taking, so they 
hated the Christians, for trying to ruin their trade in 
breed of barren metal. It was because Antonio lent 
out money gratis "and brings down the rate of usance 
here in Venice" that Shy lock wished to catch him once 
upon the hip. Shylock and Antonio are types. 



146 A BREED OF BARREN METAL 

So strong was the sentiment against the taker of in- 
crease that for a time he was denied consecrated ground 
for -burial. Dr. Wilson, a writer of this time, rather 
naively but savagely writes: "For my part I will wish 
some penall lawe of death to be made against these 
usurers, as well as against theeves and murtherers, for 
they deserve death much more than these men doe; for 
these usurers destroi and devour, not onlie whole fam- 
ilies, but also whole countries and bring folke to beg-' 
gerie that have to doe with them." 

The laws did not go so far as that. There were severe 
penalties, ho\vever,attached to the taking of usury, and 
they served as a more or less effective restricting influ- 
ence. The first penal statute against usurers was that 
of Edward 111. It provided for forfeitures and restric- 
tions. It was followed by still more rigorous laws, and 
still others were passed in the reign of Henry VII. A 
penalty of 100 pounds was attached by the latter to the 
crime of usury, as well as forfeiture of the principal and 
a depriving of the usurious lender of the privilege of 
again engaging in the business. 

The statule of Henry VIII. was the first to treat 
usury as the taking of excessive interest, and by this 
law lenders were allowed to collect not more than ten 
per cent for their money. Statutes in the same line 
were passed up to the reign of Anne and interest thus 
gradually reduced to five per cent. The statute of Anne 
was an especially strict law and seems to have been 
carefully administered with a view of enforcing its pro- 
visions, and to have been very effective in the suppres- 
sion of the taking of interest beyond five per cent. 

The laws passed since the time of Anne have been in 
the direction of relaxing the strictness of the earlier 
statute of usury, and in England and all countries 
using English law as a basis, the laws against excessive 
interest-taking have been greatly modified in that direc- 
tion. The statute was modified in England, not because 
it was ineffective, but because it was rather too effect- 
ive and did not agree with the theories of the leaders 
of English thought. 

France had an experience similar to England, and 



A BREED OF BARREN METAL 147 

the policy of that country was first in the direction of 
suppressing usury altogether, and then toward allowing 
it to a limited extent, under the term of interest. Here, 
as in England, the effectiveness of the law was deter- 
mined by the intelligence displayed in its drafting, and 
the zeal of judges in enforcing the law. It is a notori- 
ous fact that everywh ire the usurers are the persons 
who most loudly declaim against the effectiveness of 
laws against usury. 

This very general sketch serves to show that usury 
has always been questioned by some of the best minds 
of the world, and it was only in a civilization where 
material prosperity of a few was more important than 
justice to the many, that usury was finally sanctioned 
by law. Laws are usually an embodiment of the in- 
terests, supposed or real, of the persons in control of 
government, modified by a few concessions to the mul- 
titude. The concessions to the multitude in several of 
the above cases were the legal straws against usury. 

The fact that usury was banned by law under a civi- 
lization seemingly lower, and recognized by law under 
a civilization seemingly higher, proves nothing as to 
the ethical right or wrong of the custom. There are 
numerous laws founded on wrong which are now and 
have ever been tolerated. We find slavery a recognized 
institution in all the nations of the world. It was sup- 
ported and upheld by law, down to the middle of the 
nineteenth century, in countries most advanced in civ- 
ilization, yet no one would have the hardihood to say 
that slavery is right. It may be introduced again, yet 
that will not prove it right. The slavery brought about 
by interest-taking is just as worthy of condemna- 
tion. The most audacious will not for a moment assert 
that war is right in itself. Its utility to the world could 
not be established by a library of argument, yet the 
laws of all nations recognize war, and war is the raison 
d'etre of many governments. Man prides himself on 
being civilized, a being of superior intellect and senti- 
ments, and shudders at tales of cruelty in beasts; but 
neither the jackal, the lion, the tiger or the wolf have 
ever shown such utter savagery and unreasoning cruelty 



A BREED OF BARREN METAL 

as the glorious soldier of the civilized, Christianized 
nations of to-day. Their law -sanctioned action would 
be considered - outrageous, judged by the standards of 
the most blood-thirsty beasts. One might till volumes 
with a catalogue of wrongs which obtained the persist- 
ent sanction of law. Every generation has the right to 
examine all that has been handed down to it and to 
verify for itself the conclusions of those gone before. It 
is not only a right but a duty, for on this depends all 
progress. On ethical progress must depend all lasting 
material progress. Overturned and demolished idols 
are the milestones on the highway of ethical progress. 
No legal sanction can sanctify a wrong and no amount 
of popular or political combination can make false the 
true and right. If all the philosophers and mathe- 
maticians who have ever lived should come in longpro- 
-- n and declare that half of an object was greater 
than the whole, I should say, " A vaunt, idiots, you speak 
falsely!" The truth which. [ have been affirming rests 
on as secure a basis, and we can afford to fly in the face 
of convention in asserting it. But as I have shown, the 
opposers of usury are not solitary. Not only have the 
best laws of the best peoples been directed against it. 
but a long line of thinkers from Aristotle to Proudhou 
have Bought to open the the eyes of the people to the 
wrong of interest-taking. It was only because they 
failed to understand fully the absurdity implied by the 
foundation principle of interest, that they failed of 
their purpose. 



CHAPTER XXIV. 

Accumulated Wealth— It may be used as a means of exacting interest — The 
necessity of borrowing — Millions born into the world without wealth — Tools and 
machinery scarcely less necessary than land —The necessity of borrowing in 
the commercial world — Interest-takers control the currency — Glut and over- 
production — Supply and demand — Illustrations. 

u To him who has shall it be given." 

In the light of ethics, history and economics, inter- 
est-taking is indefensible. It lias from the earliest his- 
tory been the bane of civilization, it still remains the 
leaven of discord and destruction. The problem is how- 
to destroy interest-taking. In determining what makes 
interest-taking possible, we may arrive at a method by 
which the practice may be destroyed. 

The necessity of borrowing wealth for use in industry, 
gives to those persons who have accumulated surplus 
the opportunity to exact interest. When interest is 
once exacted, it, by its principle of geometric increase, 
keeps the lender in position to exact continued interest 
and the borrower under the necessity of contracting 
continued loans. Borrowing is made necessary by the 
progress of civilization in the present lines; by the 
present financial system, bythe present basis of money. 

Millions are born into the world every year. They have 
wants which must be provided for. The gratuitous 
gifts of nature are not sufficient to support in ease the 
teeming millions of the earth. Population has increased 
to such an extent that its wants, born of civilization 
and the necessities of the climate into which its increas- 
ing numbers have driven the human family, cannot be 
supplied even by the efforts of unaided man directed to 
the free gifts of nature. The best methods, the best 
machinery must be employed by every individual if he 
would succeed among the increasing multitude, in the 
ever fiercer struggle for existence. 

140 



150 A BREED OF BARREN METAL 

Tools and machinery are as necessary to modern in- 
dustry as is land. Without them, we should not have 
modern industry but the crude methods of the savage. 
The laborer with the spade and reaping-hook cannot 
compete with the laborer with the gang-plow and binder. 
The power-press daily has driven the hand-press sheet 
to the wall. The power-loom and the spinning machine 
have driven out the distaff and the hand-loom. The cot- 
ton-gin replaces the hand-picker, the thresher the flail, 
the roller-mill the mortar, the steamboat the oar, the 
telegraph the courier. If one have not these tools he 
must borrow them or wealth to trade for them, or he 
must work for another, just as surely as he must work 
for another if he have not access to land. It is only 
by intelligent labor with the best appliances that 
mother earth can be prevailed upon to satisfy the needs 
of the millions who swarm upon her breast. 

The majority of those born to the earth have not the 
implements of toil and are therefore constrained to 
borrow them, or, what is the same thing, work for an- 
other and give him the profits of their toil, retaining 
for themselves bare subsistence only. This necessity 
for borrowing must always exist to a greater or less 
extent. Under the present organization of industry, 
the great majority of those who toil use implements not 
their own, implements on which they are obliged to 
pay interest or capital profit. They are almost abso- 
lutely at the mercy of those from whom they borrow. 
Subsistence is a necessity which cannot be turned aside. 
Millions feel that necessity. It is then not difficult for 
the holder of wealth who wishes to get the most out of 
his possession to impose terms on the borrower, just 
falling short of pressing him into destitution. A man 
with starvation staring him in the face cannot haggle 
about wages, especially when there are hundreds of 
others at his side ready to work at the figures offered. 
The man in need of money to pursue his business, 
money which he must have or fail immediately, is not 
in position to drive a bargain with the money-lender. 
He must and does come to the terms of the latter. 

But in the ordinary course of business, the necessity 



A BREED OF BARREN METAL 151 

for borrowing does not depend immediately on the ne- 
cessity of engaging in remunerative toil. The financial 
system of this country and all others renders borrow- 
ing by business men absolutely necessary to carry on 
their occupations. 

They must do it in order to gain control of the 
mechanism of exchange, the vehicle of all intercourse 
between man and man. Under the laws of interest and 
rent the capitalists of the country, as such, each year 
receive an amount of wealth so large that they are able 
to save from it a sum greater than the yearly net in- 
crease of the wealth of the nation. It is theirs, they 
may do with it as they see fit. If capitalists conclude 
to hoard their wealth, that which they receive each 
year is doubly sufficient to command all of the circulat- 
ing medium of the country. Interest and capital profits 
are contracted for in money; money is the only form 
in which wealth can be hoarded without loss. It is 
money, then, that the capitalist will naturally demand. 
From his position at the head of the principal financial 
institutions of the country and his intimate relations 
with all others, he is in position to command the money 
which he wishes. The capitalist is then placed in con- 
trol of the currency of the country. He may withdraw 
it from circulation, and the only way in which it can 
be restored is by borrowing from him at substantially 
his own terms. But money represents wealth, and by 
taking the money from circulation the capitalist ties 
up in the hands of producers wealth equal, at least, to 
the face value of the money which he controls and 
hoards. In practice, he actually ties up several times 
that amount of wealth, for a given amount of money 
is usually capable of supplying a medium for the trans- 
action of exchanges to many times its face value. 

That such is the effect of hoarding money, no one 
knowing the elements of economic science will attempt 
to dispute. It is not necessary to go into an argument 
here to establish its truth. J. S. Mill has conclusively 
proved that, under normal conditions, demand and 
supply are equal and that production is the cause of 
demand. Demand, says Mr. Mill, implies the wish for 



152 A BREED OF BARREN METAL 

an article and the ability to purchase it. The produc- 
tion of the equivalent of the article desired or the tak- 
ing of that equivalent from him who has produced it, 
is the only means by which the second condition of 
effective demand can be fulfilled. Evidently the per- 
sons who pay the billions collected annually for rent, 
interest and capital profits, deprive themselves by just 
that amount of the ability to purchase,and there is just 
that much less effective demand for articles used by the 
productive toilers. Then the amount which capitalists 
decide to hoard is represented by goods on the market 
for which there is no demand. This wealth which the 
hoarded money called for, is being cared for by others 
who are obliged to bear its deterioration and the risk 
of holding,and the capitalist can afford to wait. He is 
master of the situation. He has the ability to purchase 
but not the desire, and other people who have the desire 
to demand the goods on the market, but have deprived 
themselves of the ability to do so by the payment of 
unearned incomes to the capitalist, must secure that 
right by borrowing back at the terms of the capitalist 
the ability to purchase. If they do not do this they 
must look upon glutted markets, languishing trade, 
suspended industries, idle laborers and starving multi- 
tudes. These are the indications that the active toilers 
of the country can no longer meet the conditions im- 
posed upon them by the lending capitalist, or that the 
latter prefers to hold on to his unearned gains until 
the industries deranged by his inordinate demands are 
placed on a normal footing, and there is less risk of 
loss. He waits until the panic has passed its acute 
stage, and then, like the tardy doctor, offers his medi- 
cine when the patient has, of his own resources, recov- 
ered his normal conditions or is beyond aid. If interest 
and rent were not collectible by private parties, the 
fund which the} 7 represent would be in the hands of 
the active toiler, supply and demand would always 
remain equal, there would be no stagnation, "glut," 
or "overproduction," laborers would be steadily em- 
ployed. 

When a toiler produces an article, he does so because 



A BREED OF BARREN METAL 158 

he wishes to consume that article or to trade it for 
something to consume. The toiler with whom he trades, 
if he trade directly, produces what he does with the 
express purpose of supplying the demand of the first 
toiling producer. By the act of producing each creates 
a demand for what the other produces. The demand 
is, in each case, just equal to the amount produced. 
But this is all upset by the non-producer coming in 
and taking a share of the production. He deprives the 
producer to that extent of effective demand and makes 
the goods which his fellow-producer creates for him a 
drug on the market. The interest-taker has the effective 
demand which formerly belonged to the toiler, but he 
is usually obliged to use but a portion of it, and the 
rest allows the goods intended to supply it to become a 
drug on the hands of their producers. Then the wants 
of the interest-taker are not the same as those of the 
toiler, and other sets of toilers are put to work on other 
industries to supply the wants of the taker of unearned 
incomes. So far as the great body of productive workers 
are concerned, the goods made to supply the takers of 
unearned incomes are a total loss. 

If Jack manufactures shoes which he wishes to trade 
for William's flour and Henry's meat, it is to the inter- 
est of William and Henry, as well as Jack, that he re- 
tain all of the shoes which he manufactures to trade 
for their flour and meat. For, if a portion of the shoes 
are taken from Jack in unearned charges, that leaves 
him able to buy just that much less flour and meat. 
The taker of these unearned charges may or may not 
buy flour and meat to the extent which Jack would 
have done had he retained his whole product, but as a 
matter of fact, he does not. Then when we consider 
that a like amount is taken from Henry and William, 
we see that the production of each gives him effective 
demand, diminished by just the amount taken from 
him in unearned incomes, and the toilers as a body are 
worse off by just the aggregate amount taken from 
them in unearned incomes. 

The law of supply and demand will work only where 
every one retains his own. In an economic organization 



154 A BREED OF BARREN METAL 

where a few are allowed to take a portion of the sub- 
stance of the many without giving value received, the 
law is modified and its effect appears distorted. The 
law of organisms is to develop to maturity, yet igno- 
rance or casualty makes many individual organisms 
abortive, and kills many others in an undeveloped 
state. Just so the wrongs of our economic organism so 
modify the natural laws governing it that the law that 
supply is equal to demand and that production is the 
cause of demand, is distorted, demand becoming the 
cause of production and the supply and demand being 
so poorly balanced that we have glutted markets in the 
midst of starvation, and idleness on the threshold of 
poverty. The business of the statesman of to day is to 
remove the artificial modifications of natural law and 
allow our suffering industries to reassume their natural 
equilibrium. 



CHAPTER XXV. 

Our Currency System — The effect of hoarding continued- -How it cripples in- 
dustry—An illustration— Results— Interest divided— Symptoms and causes— 
The adaptability of our present currency to the ends of the usurer— Value and 
volume — Metallic currency inadequate in volume to the country's needs- 
Figures — Volume of circulation here and in Europe— Gold product all neces- 
sary to supply the arts— Fluctuation in value and volume — Has the price of 
gold appreciated?— Silver— The single silver standard— No commodity can be 
made a non-fluctuating money standard— Value and supply and demand— Our 
currency well adapted for fluctuation— Redeemable currency— Demonetization 
of silver— Bimetallism— A will-o'-the-wisp— Gresham's law— Composite stand- 
ard — Evils of fluctuation. 

The hand that hold* the dollar is the power that rules 
the world. 

The practical manifestations of financial panic are 
very materially modified by our currency system, which 
gives power to the rent and interest-takers to control 
our medium of exchange, and thus tie up business more 
effectively than could be done under a rational currency 
system. 

When the currency of the country is monopolized, 
the laws of supply and demand are no longer operative; 
markets seem to glut while a portion of the inhabitants 
of the country are on the verge of starvation. Produc- 
tion seems to cease or drag along, just at the time when 
there is most need of wealth of various sorts for the 
support of the race. It is possible for the financial 
classes to monopolize the currency, because of the fact 
that they collect, in a few months, a sufficient amount 
in rent and interest to equal the whole volume of cir- 
culating medium. The basis of the monopoly is inter- 
est-taking, but the monopolization is made easy by the 
adaptability of the currency system to that very end. 

The hoarding of the capitalist at critical times has 
an even broader effect. It deprives the industrial world 
of the instrument of exchange called money. If a class 
of men had control of all of the scales in the country 

155 



156 A BREED OF BARREN METAL 

and refused to allow them to be used, the result would 
be a serious embarrassment to business. But money is 
a mechanism much more necessary to our exchanges 
than are scales. It enters into every transaction, both 
as a measure of value and as a means of transferring 
property. While the hoarding of scales would embar- 
rass that class of exchanges only where the goods are 
sold by weight, the hoarding of money would embarrass 
all exchanges and virtually paralyze business. Then, 
were scales cornered, we might soon produce new ones 
of the material at hand, but money is practically a fixed 
quant it} r , probably growing smaller in proportion to 
the service required of it. So close and exclusive is the 
private government-sanctioned monopoly in money, 
that if the meager supply of gold can be cornered, the 
law decrees that the hold-up is complete, that nothing 
else shall take its place, and that the hapless industrial 
victims must submit to the demands of the financial 
road agents. 

This is not an imagined danger, but is seen to be very 
tangible and persistent at times of financial distress. 
Everything but money seems plentiful enough, but that 
is so scarce that business refuses t<> move. 

The explanation is not difficult. We have become 
accustomed to make our exchanges with money and we 
cannot do without it. It is necessary, both as a denom- 
inator of value and a medium of exchange. Suppose, 
for an instant, that A had a wagon, B a horse. Ca pair 
of oxen and D several sheep. A wishes to sell his wagon 
and get a horse, B wants to sell his horse and get ;i 
flock of sheep, C wants a wagon for his oxen and D 
wants a yoke of oxen for his sheep. The demands of 
each might be supplied within the circle, but as no 
two could trade directly there must be some medium 
to carry on the exchanges, else great difficulty and an- 
noyance would result. Money, then, has a power as a 
mechanism outside of and distinct from its power as 
a representative of wealth, and may have a paralyzing 
effect on industry far beyond the actual demand rep- 
resented by the bulk hoarded. 

Viewed from whatever standpoint, the taker of rent 



A BREED OF BARREN METAL 157 

and interest or capital profit has the key to the situa- 
tion. The financial group controls the industries of the 
nation. If industries wish to proceed they must bor- 
row the mechanism of exchange from the landlord and 
usurer, and largely on his own terms. For in the loan- 
ing of capital we have the closest trust in the world. 
The money combination is so far-reaching and effective 
as to be invulnerable. The capitalists hold the fortunes 
of the toiling world in their hands and can dictate terms. 
What these terms are in times of need has been illus- 
trated in every financial panic ever known. In that of 
1893 money was held at from ten to seventy per cent or 
refused altogether, unless to the gambling class who 
could use call loans. The laborer must take less wages, 
the active business man less for the wages of manage- 
ment or superintendence, but the usurer must have his 
pound of flesh. 

It is needless in this connection to divide interest 
into interest proper, capital profits, etc. After enough 
has been set aside to keep up the capital engaged in 
business, anything that is paid for the services of capital 
and not for the actual personal services of its owner is 
an unwarranted charge on industry. It rests on the 
false principle underlying interest: that capital has the 
power of production and should be remunerated there- 
for. We have seen the truth of the proposition laid 
down by Adam Smith, but never followed to its logical 
conclusions: That the laborer produces all wealth. 
The logical conclusion is that therefore all wealth is 
rightfully his. 

We must, then, banish all taking of increase for money 
lent, and substitute for the present metallic currency 
a money which cannot be cornered. ' For admit the 
right of capital profits, and those who control the sur- 
plus wealth of the nation can, by contracts wrung from 
the necessities of their fellow-men, keep control of all 
possible net earnings of the nation's industries and 
therefore all the currency of the country. They may 
lend and re-lend, but on such conditions that when 
the day of reckoning comes they are in the same ad- 
vantageous position as before 



158 A BREED OF BARREN METAL 

It is needless to catalogue instances of the conditions 
to which attention has been called. They are manifested 
over and over again in every period of distress. The 
people have become so accustomed to money stringency, 
glut of markets, over-supply, suspension of industries, 
timidity of capital, that they are accustomed to look 
upon these phenomena as the causes instead of the 
symptoms of financial disorder. 

Grave financiers voice the same error, seemingly un- 
mindful that there must be a common cause for all 
these indications of disease in the body industrial. 

Our present money seems especially destined to be 
used as the tool of the usurer. Its adaptability for 
cornering and contraction of volume is vastly superior 
to its adaptability for any other purpose whatever. A 
glance at the facts is sufficient to substantiate these 
statements. 

Political economists hold that the value of the dollar 
is inversely proportional to the number of dollars in 
circulation, the volume of wealth being constant. While 
it is doubtful whether the law is mathematically exact 
even with the present monetary system, and while it 
is certain that it would not hold at all in a scientific 
currency system, experience has shown that with a com- 
modity money, that statement approximates the truth. 
Prices measured in money fall with contraction and 
rise with expansion of the currency. If the law be true, 
the money of the country should bear a fixed relation 
to the wealth of the country, or at least to the volume 
of that country's exchanges. The volume of a country's 
exchanges depends on the volume of that country's 
wealth and we may take the latter as an approximate 
criterion of the volume of money required. 

Placing the national wealth of the United States at 
seventy billions of dollars, gold basis, and the money 
in circulation at present at $1,740,000,000,* a recent 
estimate of the Treasury Department, there is in this 
country one dollar in currency for every forty dollars 
in wealth; placing the currency of the country on a 
metallic basis, as all clamor for; i. e., using our avail- 
able stock of gold and silver at its present money value, 

* The half billion idle in the United States vaults is not in circulation. 



A BREED OF BARREN METAL 159 

we would have but one dollar in currency for every sev- 
enty-two dollars of national wealth. Making gold the 
sole money of the country, as we have just attempted 
to do, would give us but one dollar in money for every 
one hundred forty-five dollars in national wealth. This 
estimate is made on a basis of gold stock of six hundred 
four millions, and a silver stock of six hundred fifteen 
millions, allowing one-fifth for national bank and United 
States Treasury reserves. If money be scarce and 
prices 1 ow enough to cause financial embarrassment 
with on e dollar in currency for every forty dollars in 
national wealth, it would be quite out of the question 
to carry on business with one dollar in currency for 
every one hundred forty-five dollars of national wealth. 
Prices measured in money would fall to less than one- 
third of their present level, and it would require three 
times as many goods to pay fixed money obligation as 
it would have taken at the time the debt was contracted. 
The result would be fearful to contemplate. The finan- 
ciers of the country would by one stroke get control of 
all wealth. 

Nor would there be any prospect of supplying the 
deficiency in the gold currency. For the last decade 
our national wealth has increased on an average more 
than two billions per year. To maintain the present 
ratio of the volume of currency to the national wealth 
and hence the present prices and conveniences of ex- 
change, would require a yearly addition to the circulat- 
ing medium of about fifty millions of dollars, which, 
with the proportional reserves, would amount to sixty- 
two and one-half millions yearly. The entire gold 
product of the country is but about thirty-three and one- 
half millions yearly. The coinage per year has so far 
been about equal in amount, but there is no prospect 
that this will be allowed to continue. Indeed, if gold 
were not bolstered up to such a high price by its pref- 
erence as a money metal, the entire product would 
be used in the arts. 

We cannot draw on the rest of the world, for the rest 
of the world is in little better position to make gold 
its money. Placing the wealth of the world outside the 



160 A BEEED OF BARREN METAL 

United States at two hundred twenty-five billions and 
the circulating medium, exclusive of the gold reserve 
of one-fifth, at 6,816 millions, there would be an aver- 
age in wealth of thirty-three dollars for every dollar in 
money. On a coin basis other nations would have an 
average of one dollar in money for every forty-four dol- 
lars of wealth, and on a gold basis, one dollar in money 
for ever) 7 ninety-five dollars in wealth. Estimating 
the average yearly increase of wealth outside the Unitea 
States at four and one-half lull ions of dollars, it would 
require a yearly addition of one hundred fifty-three mil- 
lions of dollars to foreign currency to maintain the 
present relative volume of currency 7 and hence the pres- 
ent prices and commercial facilities. But the entire 
gold product outside of the United States was valued 
at but ninety-eight millions of dollars in 1892, and 
twelve millions less was coined in 1891, the last year 
for which I have figures. Then if the present volume 
of money is not too great, and all will agree that it is 
not, and if it is wise to maintain at least as great a 
relative volume, an exclusive gold or an exclusive silver 
currency for the United States or for the world is quite 
out of the question. 

Fluctuation in the volume of the currency means 
fluctuation in the money standard, with all of its con- 
sequent evils. But a fluctuation in the money standard 
may occur without a fluctuation of the volume of money. 
It must occur with a money standard or value denom- 
inator based on a single commodity. Gold has never 
been a fixed standard. As compared with the whole- 
sale prices at Hamburg of one hundred staple commodi- 
ties (as collated by Dr. Soetbeer, the economist), gold 
has appreciated in value more than thirty percent since 
1873. The "Economist's" list of twenty-two index 
articles, giving average prices in London for twenty 
years, shows the purchasing power of gold to have ap- 
preciated from thirty-live to forty per cent within that 
period. A list of prices of standard articles in New 
York would show a like result. This proves beyond a 
doubt that the gold dollar has radically appreciated in 
purchasing power and that its exclusive adoption as a 



A BREED OF BARREN METAL 161 

money standard would entail all the evils of an appre- 
ciating currency. 

It is entirely irrelevant to say that gold has remained 
stationary and other things have fallen in price. A 
just money standard should adapt itself to the average 
fall in prices of other commodities or the financial 
group alone will get the benefit of improved processes 
of industry, and the value of all inventions will go into 
the pockets of the money-lenders. 

Silver having been a simple commodity, but a favored 
one, in the United States and in many of the European 
countries since 1873, sympathized pretty fully in price 
with other commodities, until at the beginning of 1893 
the concerted move of the gold forces against its use as 
a money metal threw a large supply of the commodity 
on the market and depressed the price below the normal 
standard. To be sure, increased production made the 
fall more marked. The adoption of the single silver 
standard would have the immediate effect of debasing 
the currency and driving the gold out of circulation, 
but would be followed by a reaction in which the price 
of silver would probably double and the money standard 
be appreciated to nearly its present mark. A single sil- 
ver standard would mean wide fluctuation and conse- 
quent widespread ruin. 

There is no possibility of making a fixed quantity of 
any commodity a non-fluctuating money standard. 
The price of a commodity which can be produced in 
any desired quantities ultimately depends on the cost 
of production, but the supply of a commodity limited 
in quantity, and the fixed stock of which is relatively 
large as compared with the yearly product, depends al- 
most exclusively on supply and demand. The demand 
for money may at any time reach the volume of all of 
the exchangeable wealth in the country, while at other 
times it may be much less. No one commodity in a 
country can equal all other commodities, and hence the 
demand for a commodity which is needed to represent 
all other commodities must exceed the supply. In this 
case the price must go up. This is what is actually 
happening every day. We have tried to make six hun- 



1 62 A BREED OF BARREN METAL 

died millions in gold supply the demand for two thou- 
sand millions in currency. Hence gold is sought after, 
is scarce and dear. We could make lead dear in the 
same manner, or silver or any other commodity, but 
not so rapidly, as the supply is not so meager. 

A recent writer has argued that the volume of a com- 
modity currency has nothing to do with its price. If 
its price depends on supply and demand, then the de- 
mand is greater, he argues, the greater the volume of 
the currency, and the price of a fixed quantity should 
be greater, and vice verm. It is not the absolute de- 
mand, or the demand for metal to coin which alone 
fixes the price of that metal, and therefore the value of 
the money standard; but the volume of the metal coined 
as compared with the volume of the metal available for 
coinage, or the total volume of the metal or commodity 
as compared with the total demand for the commodity 
for coinage and other purposes, which fixes the price 
of a fixed quantity of the commodity, and hence, the 
money standard. Now the smaller the volume coined 
at a certain price, the smaller the volume available for 
coinage at that price, while the smaller the amount of 
the money commodity coined as compared with the 
volume of wealth which it represents, the greater de- 
mand for the coin and consequently the greater the 
demand for the commodity to coin and the greater the 
value of the unit. The relation of demand to supply 
fixes the price of the unit. Gold and silver are subject 
to all fluctuations of other commodities and hence 
neither can ever be a fixed money standard. As a mat- 
ter of fact gold and silver do respond to the law that 
the value of the dollar is inversely proportional to the 
volume of the circulating medium, at least above or 
below a certain fixed volume. 

It would be the same whatever commodity money we 
had. If lead were made the sole money of the country, 
the demand for lead for coinage purposes would greatly 
affect the price of that commodity. 

The law of supply and demand, as I have stated 
above, holds for money as well as other articles. In 
this, too, under normal conditions, supply and demand 



A BREED OF BARREN METAL lo3 

must be equal. Now,if with a certain volume of money 
and a certain volume of wealth the conditions are nor- 
mal, if supply and demand are equal, then with any 
other volume of money with the same volume of 
wealth, supply and demand must be unequal ; or the 
only way to keep up the equilibrium is to make the 
money unit more or less valuable This is what actu- 
ally happens. If Jack holds one hundred dollars and 
it represents a certain fixed quantity of wealth, each 
dollar will buy one-hundredth part of that wealth. Let 
his dollars be increased to two hundred, while the 
wealth which they represent, or which can be purchased 
for them, remains the same, and each dollar held by 
Jack will purchase but one two-hundredth of the wealth. 
In other words, the money unit has lost one-half of its 
value. There is no contradiction in the statement that 
the value of the money unit is regulated by supply and 
demand and also by the comparative volume of cur- 
rency. 

The problem to be solved in establishing a scientific 
currency system, is to devise a money, the supply of 
which will always just equal the demand, and the value 
of a unit of which will therefore always remain con- 
stant. No metallic currency can satisfy these require- 
ments. 

Indeed, if our currency were especially invented tor 
rapid and certain fluctuation, both as to volume and 
the value of the money unit, it could not be better fash- 
ioned than now. With a currency of more than two 
thousand millions of dollars based entirely on consid- 
erably less than one-third that amount of gold, the sys- 
tem is more mercurial than mercury itself. The paltry 
stock of the yellow metal is supposed to supply United 
States Treasury and bank reserves and to redeem the 
remainder of the currency on presentation; yet it is 
but a fraction of the value which it is supposed to pay. 
How wonderfully elastic that hoard of gold! Financiers 
explain the necromancy by which gold can support 
and redeem a currency of three or four times its vol- 
ume, by saying that it is not intended that the currency 
is to be presented for redemption. That is to say: "If 



164 A BREED OF BARREN METAL 

you don't want our gold you may have any amount of 
it, but if you want it, under no circumstances can we 
let it go. We will suspend.'' The fact is that the ex- 
planation is no explanation at all. The real explana- 
tion is that two-thirds to three-fourths of the currency 
of the United States is irredeemable paper and silver, 
with the gold unit as the money standard. 

This sort of currency is allowed to remain because it 
serves the purpose of the usurer. If it happens to be 
to his interest, as it usually is, to make the dollar more 
valuable, he can just demand gold for a portion of the 
currency supposed to be founded on it; others will 
follow suit. The price of the scarce commodity goes 
flying upwards, and down go all other prices, while the 
volume of the currency goes on shrinking. The usurer's 
money will then lend for more, his fixed credits will 
be worth more. He reaps the harvest. So does the 
speculator. It is not necessary to remind the student 
of financial history of instances of this sort of manipu- 
lation. 

Of course the demonetization of silver made the vol- 
ume of this unsupported currency greater and was in 
that way an advantage to the manipulators of money. 

Bimetallism w r ill not cure the trouble. II is merely 
a sop to those who do not implicitly believe in gold as 
the divinely constituted money of the world. While 
gold and silver are used as money they will be superior 
to all other sorts of property both for hoarding and 
lending, and for that reason if for no other, will always 
in time of pressure be collected and hoarded by those 
who control the surplus products of the nation and 
dominate its financial interests. They may always be 
used as instruments to oppress industry. 

A commodity set apart as money has a great advan- 
tage over all other sorts of wealth. It is wealth gener- 
alized, capable of being readily converted into anything 
produced by the industries of the nations using that 
money. It is therefore sought by every one more than 
any special sort of wealth. 

But even if this were not true, bimetallism would 
prove a will-o'-the-wisp to the financial reformer. Past 



A BREED OF BARREN METAL 165 

experience seems to indicate the impracticability of 
keeping in circulation two distinct money metals, each 
based on its own intrinsic value; and making one the 
standard and allowing the other to be redeemed in it 
is childishly foolish. A paper dollar redeemed in gold 
is more serviceable than a silver dollar redeemed in gold, 
for the latter as well as the former becomes a mere 
circulating obligation, and the silver in it is of no more 
value than a grain of sand. Of course when it ceases to 
be a dollar and becomes grains of silver the value re- 
turns. 

But to return to bimetallism proper or the use of 
both gold and silver on an exactly equal footing. The 
same influences do not always control the prices of gold 
and silver, and there is no assurance that fixed weights 
of each will long remain of the same relative value. 
Asa matter of fact, they are both constantly fluctuating 
in price. The principle, that of two metals circulating 
together as money, that one whose intrinsic value is 
less as compared with its face value, will drive out of 
circulation that whose intrinsic value is greater as com- 
pared with its face value, is pretty well established 
under the name of Gresham's law. The expense of 
coinage has a slight tendency to modify the law, as have 
also other considerations, but still its manifestations 
are very marked. Silver was twice almost entirely 
driven from circulation because of its relatively high 
intrinsic value, and if silver was coined to-morrow and 
made legal-tender for any amount at a ratio of sixteen 
to one, there would not be a gold piece in circulation 
in six months. Under Gresham's law, the dual gold 
and silver standard would produce fluctuation of stand- 
ard and value as surely as would a gold or silver 
standard. But one metal would circulate at a time. 
When the demand for that metal for coinage, or in the 
arts, or both, or when other causes advanced the price 
of the metal, relative to its money value, beyond the 
price of the other money metal, the valuable metal 
would be melted down and sold as bullion and the 
cheaper metal would come into circulation. By the 
time the greater portion of the cheaper metal had got- 



166 A BREED OF BAREEN METAL 

ten into the circulation, the greater portion of the dearer 
metal would have been driven out. The circulation 
would still be contracted to the volume of practically 
but one of the money metals. This would entail a 
heavy loss in coining and recoining and in no way re- 
lieve contraction of the currency. 

Of course where one metal is subsidiary to the other, 
the law has no effect. 

It might be possible to establish bimetallism with a 
composite standard, and secure a volume of metallic 
currency somewhat adequate to the needs of the nation, 
but that would come so near a sane solution of a bi- 
metallic system that it would be scouted by every 
"statesman" and "practical financier" in the world. 
And it would still be a metallic currency incapable of 
responding to the laws of supply and demand, or of 
maintaining a fixed standard. A scientific money 
cannot be based on one or two metals or other com- 
modities. 

Fluctuation of the money volume or standard has 
many attendant evils. 

There is little need to argue that contraction and ex- 
pansion of the currency, with a consequent lowering or 
raising of the standard, is undesirable, but I will point 
out a few of the attendant evils. Contraction means 
high-priced money, a gain to the creditor at the expense 
of the debtor, an increase of interest and all unearned 
incomes at the expense of the producing masses, an 
easily monopolized medium of exchange. It means a 
fall in prices with a consequent diminution of the re- 
turns to active business men, a curtailing of business 
enterprises and an overstocking of the labor market, 
An overstocked labor market means lower wages. Give 
a greater return to the money-lender, increase unearned 
incomes, and the producer must get less. A relative ris- 
ing of the money standard produces a like result. A 
dollar which remains stationary in value while the 
price of each commodity which the dollar stands for 
falls twenty per cent, gives to the holder of that dollar, 
or to him who collects a debt measured in that dollar, 
the same advantage as though the dollar had appreciated 



A BREED OF BARREN METAL 167 

a like amount. The reason is, that dollars measure 
relative, not absolute values, and all debts are ulti- 
mately paid in goods. The application of improved 
methods and machinery to production brings down the 
price of commodities, and unless we would give all the 
benefit of this improvement to the money-lender, we 
must have a responsive money standard. But the tend- 
ency of all money standards so far devised, has been 
toward positive appreciation. It is necessarily so with 
any single commodity standard. And the rise in wages 
consequent to such appreciation is more than counter- 
balanced by the contraction of business and the conse- 
quent overstocking of the "labor market." Periods of 
currency contraction have always been times of distress 
among laborers. 

I am aware that Economist Walker has given state- 
ments to prove that a panic has always occurred at times 
of currency inflation. But if his statements are ex- 
amined it will be found that the panic really occurred 
during a time of contraction from a larger volume of 
currency to a smaller. The panic culminated in severe 
contraction. 

Inflation of the currency of a country or a lowering 
of the standard of value below the average price of 
commodities, gives an advantage to the debtor at the 
expense of the creditor. It artificially enhances prices, 
gives an unearned profit to the holders of goods, and 
hence stimulates speculation. Stocks of metallic money 
or money metals share this appreciation, to the benefit 
of the moneyed class. Inflation lowers the real income 
of persons of fixed salaries, and has a detrimental in- 
fluence on business morals and methods. On the other 
hand, inflation increases the volume of business, in- 
creases the demand for labor, and produces a temporary 
prosperity among the laboring masses. At least, such, 
according to Ramsey, is the lesson taught by the infla- 
tion of the Revolutionary period, and we yet hear 
laborers speak of the good times following the inflation 
of the civil war. But I am inclined to think that the 
cause was deeper, and inflation beyond business need is 
a dangerous experiment. 



CHAPTER XXVI. 

Our Banking System — The bank as an instrument for controlling currency — 
Money a close monopoly — Its effect— The importance of governmental con- 
trol of the currency— Fraud or cunning, and force — The effectiveness of the 
bank — The weaknesses of the banking system — Its effect on the community — 
Action of banks in time of panic — Their withdrawal of money from trade— A 
sound currency system — The present banking system from the standpoint of 
financiers — No solution for the currency question while the banking system 
is controlled by private individuals— Banking the peculiar province of govern- 
ment. 

To disarm is better than to stab. 

As we have seen, our currency is unstable as to vol- 
ume and standard, easily manipulated and controlled, 
and if placed on a metallic basis will be contracted to 
a volume entirely inadequate to do the business of the 
country. The bank is a ready instrument for control- 
ling the currency. It dictates our financial policies,and 
levies tribute on our commerce. Every law connected 
with currency and banking has been dictated by those 
whose business it is to exact interest for themselves 
and others. The mechanism of all others which affects 
the whole people, from the lad who collects and sells a 
dozen of eggs to the manufacturer who disposes of a 
steamship, is more closely monopolized than the tele- 
phone or the electric light. Although the idea of money 
is as old as history, the patent on the machine has 
never expired. It still pays a royalty to private indi- 
viduals, and the power for harm wielded by the manip- 
ulators of the financial machine is eloquently testified 
by smokeless chimneys, silent wheels and starving 
workmen. 

The railway and the telegraph are powerful monop- 
olies, often used by those who control them for oppres- 
sion and extortion, but the banking monopoly is a 
hundred times more dangerous. It controls all monop- 

168 



A BREED OF BARREN METAL 169 

olie3, presides at the exchange of all commodities, and 
fixes the measure by which all wealth shall be meted 
out. You may as well farm out the police power as the 
banking privilege. Indeed, in the present state of the 
world, cunning and trickery acting through powerful 
organizations are infinitely more oppressive than mere 
brute force. There is little doubt but that mere popular 
sentiment would be ample protection against forcible 
wrong, while the people are entirely at the mercy of 
the cunning and unscrupulous. Popular sentiment is 
too obtuse to see the wrong in its true enormity. It 
is the business of economists and sociologists to point 
it out, and of the people through their government to 
abate it. "He who controls the dollar rules the earth, " 
is literally true in the nineteenth century, and the peo- 
ple must gain control over the institutions which con- 
trol the dollar, or lose their, hold on government. It 
might be well said, "Let me make your currency laws 
and let him who will command your armies." 

It will not be denied that as an instrument for trans- 
ferring and canceling obligations, the banking system 
has great efficiency. If it were open to the whole peo- 
ple its efficiency would be twice as great. It would be 
capable of being made well nigh perfect. But is it now 
a safe institution to control the finances of the people? 
We have seen that the currency system has a very ques- 
tionable and crude foundation. The banks necessarily 
share its weakness. Indeed they are part of the cur- 
rency system. 

But the banks have weaknesses of their own. The 
banking capital of the United States was, in a recent 
report of the Comptroller of the Currency, estimated 
at $1,091,793,959, the total resources of the banks at 
$7,088,571,817, the cash assets at $515,987,740 and the 
deposits, individual and saving, at $4,535,908,584. Thus 
while the ultimate resources of the banks are appar- 
ently sufficient to meet all demands, the cash assets are 
at any time sufficient to meet but a very small percent- 
age of the demand which may be made by depositors 
alone. The banks are literally kept up by the assump- 
tion that most depositors will not claim their own. 



170 A BREED OF BARREN METAL 

They are absolutely dependent on confidence and credit. 
But in time of panic, the consciousness of this very 
weakness, if not the greed for gain, Avould. oblige them 
to hoard all of the ready cash which they can get their 
hands on, and keep it from the channels of business 
until the storm blows over. Depositors withdraw from 
the banks and the banks in turn withdraw fivm busi- 
ness the much needed money until nothing is left to 
carry on exchanges. To take money from business in 
time of panic is like drawing blood from a consumptive 
when he needs every spark of energy to keep up his vi- 
tality. And the banks are peculiarly well situated to 
make the draft. That they do so in times of distress 
goes without saying. During the last panic, it is true, 
the bulk of the banks saved themselves, but at what a 
terrible expense to all other lines of business! As is 
always the case, when bank favors were most wanted 
they were not to be had. If depositors had become as 
much frightened as the banks themselves, there would 
not have been an open bank in the country at the end 
of 1898. "In its incipiency it was a bankers' panic," 
says a prominent railway president. 

Yet ours is such an excellent "sound" money sys- 
tem! A banking system so stable as to arouse the ec- 
static admiration of statesmen and financiers! The 
stability is demonstrated when the "system" succeeds 
in bankrupting the industries of the sountry instead of 
bankrupting itself. 

It is quite true that from the standpoint of the finan- 
cier, which to-day is but another and milder term for 
Shylock, the present banking system is perfection itself. 
It may issue as much or as little money as it may 
choose, limited only by the value of the United States 
bonds it can control. It can collect interest on the h<i- 
sis of this money, and also the money itself. It can 
create a gold panic at will. It can make money strin- 
gency by the turn of its hand. If laws do not suit it, 
it can thrust its long tentacles into the purse of the na- 
tion and threaten to sap it dry unless laws are made to 
suit. In the inelegant but expressive slang of the times, 
the banking and financial combination has the country 



A BREED OF BARREN METAL 171 

by the leg and can make its tackling effective whenever 
it chooses. Is that a safe state of affairs for a great 
nation? 

There is no solution of the interest or currency ques- 
tion while the currency system remains in private 
hands, manipulated for private gain. The banks are a 
most important part of the currency system. They are 
now the great instruments of the usurer. To make the 
usurer harmless these instruments must be taken from 
him. The only way to make the currency system serve 
the whole people is through the people's government. 
We must have a national banking system in fact us 
well as in name. Constitutional powers are ample for 
the accomplishment of this end. 

The power to issue money has always been considered 
the peculiar prerogative of the people through the state, 
and there is no generic difference in coining or issuing 
money and establishing a banking system. A bank is 
an instrument of exchange as truly as a dollar is. Any 
power which has the control of one must have the con- 
trol of the other. 



CHAPTER XXVII. 

A Real National Bamking System— How it may be established — A detailed 
plan — The essential principles — Its effect on usury— Further provisions against 
interest-taking— A complete remedy. 

The ground is cleared; what shall the structure be? 

A real national banking system must be under the 
direct control of the government. All past experience 
has demonstrated that where individuals were given ir- 
responsible power, they used it to advance their own 
ends, regardless of others. However crude and imper- 
fect the control which the people can exact over an in- 
stitution, it makes that institution more responsive to 
the people's interests than would be any institution 
wholly unaccountable to the people. These principles 
are founded necessarily on the selfish motives which 
dominate the business world. Give men a privilege and 
they soon claim it as a right. The elected chief be- 
comes in the next generation the hereditary dictator, 
and in the third, the king by the grace of God, the 
absolute dispenser of the happiness of his "subjects." 
Just so with the financial ruler. He secures the fran- 
chise by any means, then he owns it as a vested right, 
then he alone has a right to say how it is administered. 

The problem is to institute a banking system con- 
trolled through the government of the people. It is 
very simple. No bonds need be issued, nor debts con- 
tracted beyond the rental of offices and the salaries of 
clerks, and it is to be hoped that the former item would 
not long remain formidable. It is not necessary to do 
a banking business for the people, but the banking 
business of the people. The gross product of wealth for 
each year, while in the process of exchange, will serve 
as ample capital.* 

* It must be borne in mind that all goods offered for sale must be weighed, 
measured and stored at present, and I propose no additional trouble. 

172 



A BREED OF BARREN METAL 173 

1. Let banking houses be established by the govern- 
ment in every city, village and hamlet where there is a 
market for produce sufficient to warrant such an insti- 
tution. 

2. When any commodity for which there is a market, 
is ready to sell, let the owner, if he so desires, place 
such commodity in a warehouse, private, corporate or 
public, bonded and registered for the purpose, and re- 
ceive therefor warehouse receipts. 

3. The receipts should be issued by weighers, gang- 
ers or inspectors, elected by the electors of the county, 
state or municipality in which they serve, but directly 
responsible to the head of the United States banks. 
The warehouse-owner or his agent, where the ware- 
house is private or quasi-public, may countersign the 
receipts. If the warehouse be public this should be done 
by the officer in charge. 

4. On the presentation at the government bank of 
these receipts, and the giving of additional security to 
the extent of the market value of the goods therein rep- 
resented, let the bank take up the receipts and give the 
presenter credit on the books of the bank for the market 
price of the goods stored, or issue him full legal-tender 
paper money for that amount. 

5. In the bond of security required of the person 
thus opening a bank account, let it be required that he 
sell the goods or redeem the warehouse receipts for cash 
within eighteen months from the original storing of the 
goods, under penalty of forfeiting his goods and bond 
or sufficient thereof to indemnify the bank for the credit 
advanced. The bank should be required to turn over 
the warehouse receipts to the owner or his assignee on 
tender of the amount of legal tender, or cancellation of 
the credit issued thereon. 

6. Let the warehouses be open to all classes of goods as 
at present, with the requirement that they be for sale 
in good faith, and let the banks issue credit or paper on 
goods for sale alone. 

7. Let bonds, stocks and evidences of credit be taken 
as collateral on the security bond, but let no money be 
issued on anything except real tangible wealth at its 
market price at the place where the bank is located. 



174 A BREED OF BARREN METAL 

8. Let arrangements be made by which goods in 
transit may become the basis of bank credit or cur- 
rency. 

9. Let all branches of legitimate banking be con- 
ducted by the government at cost, and the revenue be 
raised by charging a small commission on transactions. 

10. Let actual currency deposits be also made the 
basis of bank credit. 

11. Let the banking department have full charge of 
the issue of all money. Let the coinage of all metallic 
money cease and let gold and silver cease to be legal- 
tender for debts. 

12. Let the precious metals, so-called, be placed on 
exactly the same footing as other goods and allowed to 
serve as a basis for the issue of legal-tender paper. 

13. Repeal all of the present laws relating to bank- 
ing and currency, except such as may be applied to the 
new system, prohibit private individuals from entering 
the banking business, and establish the proposed system 
by appropriate legislation as to details. 

This is a plan for a scientific currency and banking 
system. I do not insist on details, but I do insist on 
the underlying principles: that all mone} 7 shall be is- 
sued on wealth in the process of exchange, that the 
actual circulating medium or money taken shall have 
no intrinsic value, or as small an intrinsic value as may 
be, and that the entire currency and banking system 
shall be under the direct control of the government. 
The end and aim of currency is to facilitate exchanges. 

Such a currency and banking system would strike at 
the very foundation of usury, and would cut borrowing 
down to a very small volume indeed. 

This would entirely relieve the necessity of borrowing 
in commercial transactions. The discounts on bills of 
credit would be immaterial. There could be no cor- 
nering of the currency and no paucity of medium of ex- 
change. 

But if money could be hoarded there would still be a 
temptation to hoard it, and to make the remedy against 
usury perfect, the currency must be made of an especial 
sort. 



A BEEED OF BARREN METAL 175 

1. Present interest laws should be repealed and in- 
terest-taking made punishable as a crime. The punish- 
ment should not be made unnecessarily severe, nothing 
more than the forfeiture of the entire debt, one-half to 
go to the informer. 

2. Loans between private parties should be made 
absolutely uncollectible except where made through 
government banks, and it should be made the duty of 
the bank officer to see that the whole amount of money 
for which security was given should be paid over to the 
borrower. Soliciting back any portion should be con- 
sidered and punished as fraud or getting money under 
false pretenses. 

3. Issue money stamped conspicuously quite across 
the face with the date of expiration, year and month, 
issue twice a year and date on any two months of the 
year, six months apart, and make such money current 
but eighteen months from the date of issue. 

4. After an issue had become non-current, allow it 
to be redeemed at par at the bank for a few days, with 
the requirement that all money presented for redemp- 
tion should be left in the bank until the entire period 
for the redemption of the issue had expired. The re- 
demption would be made in current notes running 
eighteen months longer. 

5. Where current notes of the face value of a cer- 
tain sum, say two hundred dollars, were presented for 
redemption by any one person, let him be charged a 
percentage for the redemption on the amount of the 
notes presented in excess of his average deposit or credit 
at the hank during the time for which the notes were 
current. Charge all depositors a percentage on their 
cash deposits in excess of the credit issued to them on 
goods. 

6. After the few days were past during which the 
currency should be redeemed at the bank at par, let 
a uniform percentage equal to the average deterioration 
of wealth be charged for redemption, until the non- 
current notes should become worthless.* 

*While I recommend most emphatically that the banking system be owned 
by the government, the proposed plan may readily be applied to the present 
banking system. 



176 A BREED OF BARREN METAL 

This would make it no more desirable to hoard money 
than to hoard goods, and would force those who re- 
ceived surplus incomes to invest them in real wealth or 
to loan them without interest, for use in production. 



CHAPTER XXVIII. 

The System— Its practical working— Regulation of the money volume — Supply 
and demand — A convertible currency ideal — Gold and silver — A paper cur- 
rency—Coin certificates — The money unit— What fixes its value — Volume and 
the unit — Price of the metal and the money unit-Gold a constantly appreciat- 
ing money unit — A mixed currency — The value of the commodity money unit 
depends on the market price of the material of which the money is composed- 
Auxiliary currency — Silver— Intrinsic value not necessarily an attribute of 
money — The proposed money a paper maney — The weakness and strength of 
paper currency — Historical instances — Paper money always resorted to in des- 
perate national crises— Metallic money always fails in time of nationatneed — 
The bankers' proposition— The proposed currency and supply and denim! 
Incapable of fluctuation. 

In the light of what is, we nun/ discover what should be. 

The practical working of the system would lie very 
simple. We will suppose, for illustration, that a bank 
is established in a small town surrounded by an agri- 
cultural population and carrying on within its borders 
some manufacturing business. The town, of course, is 
supplied with stores, so that nearly all functions of the 
commercial bank will be brought into requisition 

To begin with the simplest, we will suppose that the 
farmer wants to market his crop. He may go into the 
city and sell it as he does now to the local dealer, and 
then it would be the local dealer who would do busi- 
ness with the bank. He may want to hold a portion of 
the crop for a few days and borrow on it. He may want 
to take his time at selling it. In that case he will take 
a load or several loads into town and, as farmers do at 
present, store it in one of the grain warehouses, taking 
warehouse receipts therefor. He will then file a bond 
with the bank and present these warehouse receipts or 
a portion of them and receive bank credit or money 
therefor. With this money he will go to the merchant 
and purchase a portion of his year's supplies. The 
merchant will take the money to the miller and lay in 
a stock of flour for his town customers, the miller will 

177 



178 A BREED OF BARREN METAL 

go to the farmer and purchase his wheat to keep up his 
stock of flour and the farmer will use the money to re- 
deem the warehouse receipts and release his wheat. 
The money which the farmer has issued on his wheat 
might serve as the medium of a dozen transactions. 
The farmer might use it to pay the blacksmith, who 
might use it to pay his helper, who might pay it to the 
doctor, who might pay it to a music teacher or artist, 
who might pay it to a merchant, who might pay it to 
a manufacturer of shoes, who might pay it to a lumber 
man, etc., until that or other money would be paid 
again to the bank to redeem the warehouse' receipts, in 
pledge and release the wheat from the warehouse. 

Just in the same way the manufacturer of furniture, 
let us say, might store his goods, obtain receipts, and 
presenting them with his bond at the bank, obtain 
money with which he might buy raw material, pay 
wages to workmen, etc., etc., until such time as he 
might sell his goods, when he would use the money re- 
alized from the sale, or a portion of it, to redeem the 
warehouse receipts and turn over the furniture to the 
purchaser. 

The miller might store his flour and get money on it 
to buy wheal, pay for his barrels and his hands and 
keep his mill going. The necessity for redeeming his 
pledges would, of course, make it incumbent on him, 
as well as all the rest, to sell his goods as rapidly and 
as advantageously as possible, but while he had an 
equivalent in value he would have no trouble in pur- 
chasing what he wanted or of using it as live capital to 
carry on his business. 

The merchant might store his surplus stock, draw it 
from the warehouse in consignments, and use the money 
issued upon it to meet current expenses and keep up 
stock. The miner might store his product and have 
money issued upon it to keep up his business while he 
negotiated its sale. In any branch of business there 
would be no such thing as a scarcity of money. As 
soon as goods were produced and placed in the common 
stock their representative currency would be placed in 
circulation Each dollar's worth added to supply would 



A BREED OF BARREN METAL 179 

be a dollar added to effective demand for goods of some 
sort. Commerce could never become stagnant for want 
of a medium of exchange. This town would be a typ- 
ical town. 

There could never be too much money, for every dol- 
lar added to the currency would presuppose a dollar's 
worth of wealth placed publicly on sale. According to 
the unswerving law of economics there is a supply for 
every demand, and the dollar founded on demand would 
find its supply. 

In the natural course of business the money would 
be first issued to the original producer. He would pay 
it to those who would place it in the hands of the re- 
tailer. The retailer must turn it over to the wholesaler 
and the wholesaler pay it back to the original producer 
to go back to the bank of issue. 

There never yet was a proposition put forward which 
did not meet with objections, and this is no exception. 
Let us look over a few of the more prominent. 

There is not an intelligent financier living who will 
not admit that a currency founded on value to the full 
extent of the issue, and perfectly and quickly converti- 
ble, is an ideal currency. The proposed currency has 
both of these qualities. It may be said that the pro- 
posed currency is not convertible into gold. I answer 
that the whole stock of gold in the country is at your 
disposal if you have the wherewithal to purchase it. Is 
more to be had at present? And upon what is based 
the superstition that gold is the only sort of wealth 
which will cancel a debt? Simply on the traditional 
worship of the golden calf. Gold will cease to be legal 
tender as soon as it loses that quality by law. As soon 
as people become enlightened enough to realize that a 
dollar's worth of iron is really as valuable as a dollar's 
worth of gold, they will see without difficulty that a 
note redeemed in any sort of wealth which the owner 
may choose, including gold, is as truly a redeemable 
note as a note redeemable in gold alone. 

If under the proposed currency you want to ship gold 
to other lands in exchange for goods, it will be much 
easier than now to obtain it. It will be more plentiful 
and cheap, for the great demand for it as a money metal 



180 A BEEED OF BARREN METAL 

will have passed away. As was said above, there are 
all other sorts of wealth into which one may convert 
his currency, and currency converted into gold or any 
other form of wealth you may choose, is certainly more 
truly convertible than currency convertible into gold 
alone. If quick and certain convertibility is a quality 
of good currency, then the proposed currency is supe- 
rior to any currency yet known. The fixed security, as 
well as the deposit of wealth on which the money is 
founded, makes the convertibility absolutely certain. 
A dollar is redeemed every time it is accepted for goods. 

Paper money absolutely secured is an ideal currency. 
Thus economists agree that certificates issued on coin 
are superior to any other form of currency, for they are 
quickly redeemable, perfectly secure, more easily han- 
dled and in every way better adapted to the processes of 
exchange, than is the coin on which they are founded. 
Wealth certificates are necessarily superior to coin cer- 
tificates. They have all the convenience and double the 
security of the former and are issued on such a princi- 
ple as to make them available for any one who wishes 
to exchange wealth. In fact they have greater conveni- 
ence than have any coin certificates, for a coin certificate 
without the legal-tender quality would be good for the 
coin only, while the proposed wealth certificate would 
be good for any sort of wealth in the market. If the 
coin certificates are made legal-tender, then they are 
simply limited wealth certificates used as money, and 
the coin becomes simply stored wealth, differing in no 
way from the wealth proposed as a basis of currency. 

Up to a volume equal to the amount of wealth at any 
time offered for sale, the proposed currency would be 
perfectly stable in unit of value. It is commodity 
money, or money founded on commodities small in 
value as compared with the wealth represented, whose 
unit value is affected by change of volume. Above the 
volume of wealth offered for sale, this currency volume 
could not go. 

Economists have long given unsatisfactory explana- 
tions of the considerations on which depend the value 
of the money unit, and a few recent writers in trying 



A BEEED OF BARREN METAL 181 

to make it clear, seem to have involved the matter more 
than ever. 

The considerations governing the value of the money 
unit depend, to some extent, on the sort of money which 
is under consideration. If the money be credit money, 
the value of the unit depends on the volume issued, 
above or below the normal amount. Thus, if we con- 
ceive the stock of wealth to be twenty sheep and con- 
ceive these sheep to be represented by one hundred 
dollars, each dollar will represent one-fifth of a sheep. 
Now let the currency be swelled in volume so that the 
sheep are represented by two hundred dollars and each 
dollar will represent but one-tenth of the value of a 
sheep. Let the currency be contracted to fifty dollars 
and each dollar will represent the value of two-fifths 
of a sheep. Here we presuppose that the credit back 
of the currency is good and that the money token has 
no intrinsic value. In a state like that the salable 
wealth in the country would be represented by the dul- 
lars in the currency of the country and the value of the 
dollar would be inversely proportional to the volume 
in circulation. Up to the limit of the credit the cur- 
rency unit could in no way be affected by the relation 
of the credit to the volume. Every dollar of the cur- 
rency would be a demand for the part of the salable 
wealth represented by a fraction with one as a numer- 
ator and the number representing the volume of the 
currency as the denominator. It will be readily seen 
that any increase in the denominator will decrease the 
value of the fraction or the money unit, and any de- 
crease in the denominator or contraction of volume of 
currency must increase the value of the fraction or the 
value of the money unit.* What is the actual volume 
of money, is not of such importance, provided the money 
be allowed to circulate freely and the volume remains 

*It is true that with a mixed or heterogeneous currency like that in use at 
present, referred to a single commodity as a measure of value, the value of that 
commodity, other things being equal, determines the prices of other commodities. 
But the value of the money commodity is determined largely by supply and de- 
mand, and anything which tends to diminish the demand "for the money com- 
modity tends to lower its (exchange) value. It is obvious that in the proportion 
which other sorts of money are used the demand for the standard commodity as 
a money commodity is lessened, and and its value decreased. Then, here too, 
the law of inverse proportion between volume and unit value tends to hold goo<?. 



182 A BREED OF BARREN METAL 

constant. If we did a strictly cash business it would 
not make much difference if horses sold for ten dollars 
each and wheat for twenty cents p"er bushel, provided 
everything else sold accordingly cheap and these prices 
did not fluctuate. 

With a commodity money, or a money token of 
intrinsic, equal to its face value, the volume of the cur- 
rency has but a secondary consideration in determin- 
ing the value of the money unit. The value of the 
money unit depends on the price of the commodity of 
which the money is made, provided always that there 
is free coinage or manufacture into money in unlimited 
quantities of the commodity used as money. Thus, if 
the gold dollar becomes more valuable than the gold 
in the dollar, the holders of gold bullion will have it 
converted into dollars until the increased volume of 
the dollars will bring their face value down to their in- 
trinsic value. Conversely, if the weight of gold in the 
dollar would sell for more as bullion than it would buy 
as a dollar, the gold coins would be melted down or the 
gold bullion held from coining until the scarcity of 
coin or metal to coin would bring the face value up to 
the intrinsic value of the dollar. If this were not so, 
where gold alone is money we should find a discrepancy 
between the face and the intrinsic value of the coin, 
which is contrary to experience. 

The value, then, of the gold money unit, or any other 
commodity money unit, must depend on the price of 
the metal or the commodity, independent of its money 
value. This price depends almost entirely on the sup- 
ply and the demand of the metal. Not the demand for 
coining alone, but the demand for coining and all 
other purposes. 

Volume of circulation plays a secondary part. Where 
there is an increase in the volume of circulation, the 
supply of gold remaining constant, the demand for 
gold to coin must increase the price of the metal and 
therefore appreciate the money unit. A demand for 
gold in the arts would have the same effect. Now if 
gold were the only money in circulation and the wealth 
of the country remained constant, the increase in the 



A BEEED OF BARREN METAL 183 

volume of the currency, which would increase the de- 
mand for and therefore the price of gold, would in a 
measure have a compensating effect by decreasing the 
purchasing power of the dollar. But this effect must 
be rather theoretical than practical, for as a matter of 
fact, no gold could actually be drawn from the arts 
while it was more valuable for use there than as a money 
metal, and the currency volume could not be increased 
with a falling money unit, except wheie the supply of 
gold for all purposes outran the demand so as to make 
its price fall everywhere. 

Then again, the wealth of the country is not constant, 
but increases so rapidly, as we have seen, that the 
amount of gold which may be used for coinage cannot 
possibly keep the volume of money proportionally as 
large as at present. On a gold basis the relative volume 
must ever decrease and the unit appreciate. 

Then our mixed currency, some founded on one prin- 
ciple and some on another, prevents any uniform man- 
ifestations of monetary economic law. 

We see, then, that the value of the money unit depends, 
in a commodity or metallic currency, on the market 
value of the metal of which the money is composed; 
that the laws of supply and demand keep the money 
value and the market value of the metal equal, or nearly 
so, and that the volume of money has but a secondary 
effect on the value of the unit.* 

The larger the volume of other currency founded on 
the standard money metal and redeemable therein, the 
more fluctuating the demand for the standard money 
metal and the more variable the money unit. Auxiliary 
currency is really but a tool for manipulating the stand- 
ard currency, and if the shock of contraction could be 

♦Strictly speaking, no money while it is being used as money, has intrinsic 
value. When being used in exchange it is a representative of wealth to its face 
value. A gold dollar cannot in the same transaction have a representative value 
of a dollar and also an intrinsic value of a dollar, for if it had we could get two 
dollars in wealth for every dollar in gold But that is contrary to experience. We 
can trade the metal in the dollar for a dollar's worth of goods (that is barter), or 
the dollar itself for a dollar s worth of goods, but we cannot buy wealth for both 
the dollar and the metal in the dollar. When used as a dollar the gold in the 
gold dollar is not worth a rap. Intrinsic value is entirely sequestered and 
becomes available only when the dollar becomes a commodity. That is ones 
reason why a metallic currency is so extravagant. The metal in the money lose 
all intrinsic value while it is used as ironey, and that amount of wealth is. 
practically subtracted from the nation's assets. 



184 A BEEED OF BARREN METAL 

once gotten over, the country would be better off in all 
respects with but the standard currency, without the 
mongrel auxiliaries, useful only in manipulating the 
currency. 

It may be said that the silver coins in present use do 
not accord with the laws enunciated above. Their 
money value is greater than their intrinsic value; their 
money value and the price of the metal have nothing 
to do with each other. It must be borne in mind that 
silver is not, and has not for the last twenty years, been 
a money metal in the strict sense of the word. The 
coinage of silver was not free but arbitrary, and there- 
fore the face value of silver coins was allowed to ap- 
preciate above the bullion value without its being 
possible to offer enough for coinage to raise the price 
of the white metal to a like standard. As a matter of 
fact, silver money as at present used is mere credit 
money, differing in no essential manner from paper 
money. Its standard is gold, and the fixing of the price 
of gold fixes the value of the silver as well as the paper 
dollar. 

Whether a money must have intrinsic value, depends 
on one's definition of money. A recent writer labors 
to show that all money must have intrinsic value and 
goes on until he finally makes money synonymous with 
wealth. Carry his system to its logical conclusion, and 
all wealth would become money. ' This is absurd and 
leads only to a confusion of terms. Scientific money is 
a mere medium of exchange, a mere token of title, and 
cannot be identical with the wealth exchanged. It is 
in this sense, at least, which I wish to use the term in 
the following pages. I wish to make as sharp a distinc- 
tion between the currency and the wealth which the 
currency is founded upon as I would between a title 
deed and the land, the ownership of which was indicated 
by the title deed. The one is the instrument of trans- 
fer and the other the thing transferred. There is no 
advantage in jumbling them together and calling them 
both by the same name. It is positively erroneous. 
Money is at least but a generalized claim for wealth to 
the amount of the current value represented by the 



A BREED OF BARREN METAL 185 

former. You cannot generalize any particular sort of 
wealth as such. By money I mean the money token, 
nothing more. Currency I use in a broader sense as 
any contrivance used in exchange, including banking 
systems. The token need not have value, but must rep- 
resent value. 

It may be said that the proposed money is paper 
money and therefore not desirable. If you mean paper 
credit money or fiat money, in the sense in which it 
has been heretofore known, then the statement is incor- 
rect, but we have had no experience which would war- 
rant us in condemning even this. There has never been 
a pure paper or credit currency in any nation. All sys- 
tems of paper currency so far established have been 
exploited side by side with gold and silver. It has 
always been the established policy of the most influen- 
tial financiers to do all in their power to discredit and 
depreciate the paper currency and finally turn to specie. 
The paper money in our currency system has been 
little else, in times of peace, than a tool with which 
to manipulate the standard metallic currency. 

Adam Smith, who is considered an authority on such 
matters, did not distrust paper money because it was 
paper. He writes: 

U A paper money consisting in bank-notes, issued by 
people of undoubted credit, payable upon demand with- 
outany condition, and, in fact, always readily paid as 
soon as presented, is, in every respect, equal in value 
to gold and silver money; since the gold and silver 
money can at any time be had for it. Whatever is 
either bought or sold for such paper, must necessarily 
be bought or sold as cheap as it could have been for 
gold and silver." 

While the gold and silver money could not be had 
for the proposed currency, gold and silver or any other 
sort of wealth may be had for it, and it would therefore 
be better than the best of bank notes. 

Let us briefly review the historical instances in which 
paper money is said to have proved a failure and see 
whether this paper money had much in common with 
the proposed currency. Continental money is orte of 



186 A BREED OF BARREN METAL 

the first object lessons which the advocate of metallic 
money will point out for the benefit of his paper cur- 
rency brethren. The Continental currency was issued 
by a nation without autonomy, without credit, without 
taxing power; a nation whose very existence depended 
on the desperate chance of a few scattered colonists de- 
feating in war the greatest power of Europe. It was 
issued as a credit money; no means were provided for 
its redemption; yet it floated at par to a considerable 
volume. While the fortunes of the war and the pros- 
pects of a nation were even fair the money circulated, 
and was finally made worthless only by over-issue, coun- 
terfeiting and threatened repudiation. We can then 
gather from this instance nothing as to the stability of* 
a money founded on good credit, nor a paper currency 
founded on wealth to double its face value. The issue 
of paper money at the time of the Revolution was 
simply a means of obtaining a loan or rather a contri- 
bution, and can in no way be compared with the issue 
of money for the ordinary needs of business. 

The issue of greenbacks at the time of the civil war, 
as well as the issue of other circulating paper was made 
simply on the general credit of the nation, at that time 
menaced by the most formidable rebellion of history. 
That it depreciated is not surprising. That it circu- 
lated at all is far more so. Then in the issue of paper 
money in war time there was no criterion as to what 
amount was necessary to carry on the business of the 
nation. The channels of trade were relatively over- 
loaded. The paper money itself was discriminated 
against by law, in not being made receivable for all 
debts, and it was exploited by the side of metallic 
money which was cornered by financiers and used as 
an instrument to depreciate the paper currency for the 
purpose of speculation. From the facts surrounding 
the civil-war issue of paper money we are warranted in 
concluding that the money was as good as the credit of 
the issuing nation. We have good reason to believe 
that had the credit been perfect, the money would not 
have depreciated until over-issued, especially if it had 
full legal-tender qualities and was not subject to the 
manipulations of speculating financiers. 



A BREED OF BARREN METAL 187 

Confederate money was founded on poor credit, de- 
generating into none at all, was over-issued and coun- 
terfeited, and hence is no criterion of the feasibility of 
a credit currency founded on good credit and issued up 
to the limit required for business. 

The French assignats come the nearest to being an 
example of pure credit money, but the inadequate 
measures taken for their redemption, the want of a 
guide as to the bulk which was needed in the country, 
and the very precarious state of the issuing nation all 
conspired to place the system in bad repute. In this 
instance, as in all others, conspiracy of the financiers 
of the world against any form of currency which 
threatened to dethrone the dominating influence of the 
precious metals, had much to do with the overthrow of 
the French currency system. Counterfeiting also 
played a very important part. The Continental cur- 
rency of America, as well as the French assignats, was 
counterfeited to an enormous extent,and this had much 
to do with the final worthlessness of both. Yet they 
both served their purpose. Without the Continental 
money the American Revolution could never have been 
brought to a successful issue. Without the forced loans 
from the nobles which were obtained largely through 
the assignats, it is doubtful if revolutionary France 
could have kept feudal and monarchical Europe at 
bay. The effect of decentralization produced by the 
assignats was a boon to France. The result of the War 
of the Rebellion was largely affected by the issue of 
paper currency. But if all of these were absolute fail- 
ures that fact would not prove the impracticability of 
the proposed currency. 

This all goes to show that the fact of a currency be- 
ing paper is nothing against it, as the weakness of all 
former issues of paper currency is readily explainable 
on the ground of the weakness of the principle on which 
the issue rested. A paper currency resting on a sound 
basis may be the best currency in the world. 

If paper currency is so useless, why is it that at times 
of greatest national hazard it is always resorted to? If 
metallic money is so much more stable, why did we not 



188 A BREED OF BARREN METAL 

stick to it in our struggle for national life and later for 
national existence? The fact is, metallic currency proved 
itself inadequate before either struggle had fairly be- 
gun, and the much abused paper was relied upon to 
tide over a crisis where commodity currency failed. 

Other countries have had the same experience. Eng- 
land had to abandon specie in her Napoleonic wars and 
paper currency was her only refuge. It Avas not the 
first time that she had to resort to like measures. The 
French Republic had often the same experience. In 
time of desperate war Holland adopted much the same 
plan as I propose. If the history of finance has taught 
one lesson more plainly than all others, it is that a 
metallic currency is utterly unreliable in times of na- 
tional calamity. The phenomenon is easily explained. 
Metallic money is the safest and easiest sort of prop- 
erty to hoard. All who can, will in times of national 
or financial disaster turn as much as possible of their 
surplus property into gold and silver. There is always 
sufficient surplus wealth to appropriate all of the money 
metal in circulation, and in times of pressure a nation 
with a metallic currency is left practically without a 
circulating medium. That which escapes the miser 
gets into the hands of the speculator, who uses it for 
extortion and places himself in such a position that 
when peace comes he may reap a harvest. 

But we do not have to wait for times of war to show 
the inconsistency of metallic money advocates. The 
apostles of the gold mania, the very bankers who a 
year or more ago clamored so loudly for gold, have 
lately put forward a plan to supply the nation with a 
paper currency. Their idea seems to be that paper is 
very good if the issue is under their control and made 
in such a manner as to allow them to reap a substantial 
benefit. Let metallic money advocates point out a 
country where metallic currency has served all the needs 
of trade in times of peace, or met the exigencies of war, 
and we will then be ready to listen to their tirades 
against paper monej 7 because it is paper money. But 
there is paper money and paper money, and because 
wild schemes of unlimited or arbitrary issue of paper 



A BREED OF BARREN METAL 189 

money are subject to criticism, is no reason why we 
should doubt paper money fully secured and issued only 
as demanded by the exigencies of trade. 

The money proposed by the bankers is quite as unre- 
liable as any fiat issue yet concocted. What has the 
amount of banking capital to do with the volume of 
exchanges carried on within a year? One is no crite- 
rion of the other. 

The supply of the proposed currency must always 
equal the demand. Supply and demand in general are 
always equal. Any dollar's worth of wealth may have 
issued thereon a dollar for effective demand, and, there- 
fore, one cannot imagine a case where a demand for 
money will go unsupplied. The currency is issued on 
wealth intended to supply a demand only,and therefore 
there can be no redundancy of currency. The criterion 
is whether the wealth is for sale. After money has 
performed its function of exchanging wealth it is with- 
drawn from the circulation simultaneously with the 
wealth which it exchanges, making over-issue impossi- 
ble. No commodity money can be regulated in that 
way, for the value of one or two commodities must be 
less than the value of all other commodities, and as all 
other commodities must have that one commodity for 
a representative, the demand must necessarily exceed 
the supply. This is still true even when we consider 
that demand for currency is made only by commodities 
for sale. It does not help matters to say that the whole 
hoard of gold or silver is set over against the commodi- 
ties being exchanged at any one time If a whole year's 
product is not exchanged at one time, neither is the 
whole volume of money mediating, or capable of medi- 
ating exchanges at any one time The bulk of the 
currency is usually out of active use, just as the bulk of 
goods is out of active trade. A single commodity money 
must necessarily be subject to all the fluctuations of 
the commodity which composes it. 

All commodities taken together can never fluctuate 
in exchange value. They can change in respect to one 
thing only: the labor by which they are produced. 
However much more effective that labor may become, 



190 A BREED OP BARREN METAL 

the same relative productive effort will always com- 
mand from nature the same relative remuneration. It 
is only where the idler steps in and takes a portion of 
the production, that this law is modified. A money 
issue founded on all commodities can, then, never fluc- 
tuate. There could no more be too great a volume of 
such a currency than there can be too great a volume of 
commodities in general. Every dollar would represent 
a dollar's worth of wealth capable of being purchased 
by that dollar. 



CHAPTER XXIX. 

The System Continued — The money standard of the proposed system — Gold 
as a standard — Its fatal defects— Contracts made for payment in gold — Gold 
not a standard, but a value denominator— A fluctuating standard radically 
faulty — The real standard — Objections noticed — A fixed quantity of human ef- 
fort the real standard— How to arrive at such a standard — Buying and selling — 
But two factors in production. 

The scales of justice are balanced alike for all. 

There is do difficulty about establishing the proposed 
money standard. Gold is not properly a standard a t 
all, for it is subject to fluctuation. The very fact that 
it is used as money makes its price more unstable than 
it otherwise would be. The supply is limited. The 
volume of the metal produced in any one year is insig- 
nificant as compared with the volume in actual exist- 
ence, so that the price is regulated scarcely at all by 
the cost of production and depends almost totally on 
supply and demand. This is very precarious. The 
supply of gold is ridiculously insufficient, as we have 
seen, to carry on exchanges, and hence the unsatisfied 
demand must make it tend rapidly upward until there 
is some new deposit discovered, when the fall is sharp. 
In times of pressure this fluctuation is accentuated by 
speculative manipulation, when the price of the metal 
often changes several hundredths in a few days. Thus 
debts are paid by a different standard from that by 
which they are contracted. It will take more iron or 
coal or wool to pay a debt, than could be purchased for 
the money borrowed at the time at which it was bor- 
rowed The creditor is made a present of the amount 
of the gold appreciation, a present which for the past 
twenty years amounted, on an average, to more than 
two per cent per annum. 

While there may be a general fluctuation in money 
prices, there can be no general fluctuation in value. 

191 



192 A BREED OF BARREN METAL 

Where the money prices of all staple articles fall, the 
fact is that values remain the same and the money ap- 
preciates. Values being relative, a general rise or fall 
involves a contradiction. There can be no general rise 
or fall in values as compared with any except the labor 
standard. If by the use of machinery all articles can 
be produced with less labor, that does not change their 
relation to each other and hence their value. For this 
reason, the gold advocates who claim that gold remains 
stationary in value while all other articles depreciate, 
make a statement which is misleading if not absolutely 
false. Probably it takes no more labor to produce an 
ounce of gold now than it did twenty years ago, but 
the labor now required to produce an ounce of gold is 
certainly greater in comparison with the labor required 
to produce a bushel of wheat, or a pair of shoes, or a 
coat, or a chair, or a carriage, than it Mas twenty years 
ago. Hence gold is a false standard for gauging the ob- 
ligations of debtor and creditor, for' it is with wheat, or 
shoes, or coats, or chairs, or carriages or some other ar- 
ticle of production that debts are really paid. 

It is asserted that contracts are made for payment 
in gold and that hence the debtor but pays what he 
really owes and has nothing to complain of. Such a 
statement begs the question as to an injustice-working 
currency. When one contracts a debt he intends to 
contract to pay in principal just what he received. Our 
currency systems are supposed to be especially designed 
for the purpose of making contracts exact in this re- 
spect. If then by a stealthy appreciation ot the cur- 
rency, one is obliged to pay back more than he has 
received, an injustice is done him. Even though what 
he pays back costs him no greater labor effort than what 
he received would have cost him at the time he received 
it, he is done an injustice if what he is obliged to re- 
turn is capable of supplying a greater number of wants, 
or of purchasing a greater number of commodities than 
what he received. Otherwise we must hold that the 
creditor class is entitled to all return for increased 
effectiveness of improved machinery. It is labor which 
produces this effectiveness. 



A BREED OF BARREN METAL 198 

In fact gold is not a standard at all, but a sort of 
rough value denominator; and the exchanges made 
with gold on a gold basis are merely barter, a trading 
of commodities, an improvement on primitive barter 
only because of the fact that gold is more readily di- 
visible and portable than the average commodity. 

A fluctuating standard must be radically faulty. 
What would we say of a yardstick which would be 
thirty-six inches this year and thirty-nine the next; or 
a pound which would contain sixteen ounces this year 
and eighteen the next? Yet this is the exact position of 
the gold money standard. And the demand for gold 
has so outrun the supply that the gold dollar must ever 
remain the yardstick of increasing length, the pound 
of increasing weight. The scramble for the meager 
supply must forever push the price upward. Were gold 
not the tool of misers, usurers and monopolists, the 
whole product might be profitably used in the arts. 

There is but one standard in the world which does 
not change and never can: a fixed quantity of the same 
quality of human effort. This standard has always 
determined the value of commodities in general and 
always will. Supply and demand may for a time affect 
the price of this or that commodity. (Where the de- 
mand is artificially regulated, as with gold, and the 
yearly product is insignificant as compared with that on 
hand, and the commodity itself is well nigh imperish- 
able, demand may be the chief factor in determining 
the price. ) But the average value and hence the price 
of any commodity is always dependent upon this prin- 
ciple: What relative amount of human effort of a cer- 
tain quality did it take to produce that commodity as 
compared with that which you seek to exchange for it? 
Labor, the producer of all man-made wealth, is the only 
1 rue measure of value. Human effort in general may 
be remunerated by greater results this year than last, 
but an hour's toil, whether of brain or hand, is an 
hour's toil this year, it was last and it will be as long 
as there is a toiling human. Man's judgment of the 
value of any article depends wholly on the effort re- 
quired of him to secure that article. Value to man is 
interpreted only in terms of toil. 



194 A BREED OF BARREN METAL 

A writer says that labor is an act and not a quantity 
and can therefore never be used as a money standard. 
It would be interesting to know just what he means by 
the assertion. If it is that labor has not quantity, then 
the statement is manifestly false. Labor is nothing 
more nor less than productive effort. Productive effort 
has quantity as much as an electric current or the work- 
ing force of a steam-engine. The effort of a day is 
greater in quantity than the effort of an hour, provided 
both efforts be of the same intensity. We measure the 
force of currents of electricity by results. We measure 
the working force of machines by results. We have a 
unit by which this is done, an actual tangible unit. 
Why can we not measure labor by results and in that 
way fix a unit which may serve as a measure of all re- 
sults of labor? That would be a standard of value, a 
money standard. Whether in paying wages we pay for 
labor effort or for the goods, is entirely immaterial. 
Our judgment must in both cases be based on tangible 
results. 

The same author gets the cart squarely before the 
horse when he says that it is the product which imparts 
value to labor. The fact is that labor imparts value to 
product. That which requires no labor, unless monop- 
olized, never has any (exchangeable) value. That which 
requires labor has always more or less value and usually 
in direct proportion to the amount of labor expended. 
And as a matter of fact labor has value, for it is every 
day in practice exchanged for valuable substantial com- 
modities. The hair-splitting is as unnecessary as erro- 
neous. The author is simply misled by the fact that 
labor must necessarily be judged by results and rewarded 
accordingly. Land is not an example of value without 
labor, for it is the labor-produced civilization on earth 
which has given value (exchange) to land. 

The ideal measure of value,as well as the ideal money 
standard, is a fixed quantity of human effort of a cer- 
tain quality. This is really the yardstick by which the 
results of all human effort are measured. But we are 
too ignorant or unskillful to determine the quality of 
labor directly. We must therefore judge by results, 



A BEEED OF BARREN METAL 195 

and in this way we may closely approximate the ideal 
standard. 

If there were no debtors and no creditors, there would 
be no necessity of fixing a tangible value for the Tabor- 
effort dollar. On a strictly cash system, the dollar 
may be made in terms the value of the result of an 
average hour's toil, and the market price of the commod- 
ity sought be left to determine what that value would 
be at any particular time. Currency loans would be 
paid in currency founded on wealth in the process of 
exchange. The actual money would be founded on the 
wealth which the debtor had added to the common 
stock, and it is with this that he would actually pay 
the creditor. The creditor would not receive that com- 
modity, but the right to demand in the market any 
commodity which he chose, provided he paid the mar- 
ket price therefor. The creditor could demand neither 
wheat, nor corn, nor coal, nor iron, nor gold, directly 
from the debtor in any fixed quantities, but he could 
demand and secure that debtor's right to demand coal, 
or iron, or wheat, or gold, which at their market price 
would be represented by the number of dollars called 
for by the contract of indebtedness. If the same dollars 
paid for all commodities and all services at all times, 
it would be immaterial what the ultimate standard of 
the dollar was. Its value would be determined in every 
exchange. 

But as there are debts, it would be necessary that the 
labor currency unit should correspond closely with the 
dollar now in use, or rather what the dollar should be. 
This, it was seen, would be the standard of 1873. 

It takes a certain amount of labor to produce a dol- 
lar's worth of product in any and all industries. That 
neither debtor nor creditor should suffer by the pro- 
posed change of standard, we should determine what 
quantity of labor is on an average required to produce 
a dollar's worth of commodity, and we should make 
that quantity of labor the dollar. 

There would be no difficulty in ascertaining what 
such quantity of labor is. The material is at hand. 
One can ascertain with accuracy the average amount of 



196 A BREED OF BARREN METAL 

toil expended in producing a bushel of wheat, a case of 
shoes, a bolt of cloth, a ton of iron, a ton of coal, a 
plow, a locomotive, etc. Let the amount of toil re- 
quired in each case be compared with the average price 
of the article in four or rive markets, and from this it 
would be easy to determine the average amount of labor 
required to produce a dollar's worth of "goods. This 
could be made the money standard and there would be 
no perceptible change. If it was thought best, the stand- 
ard might be expressed in terms of product, but I deem 
labor terms the best for the expression of the standard. 
In practice, the standard would mean simply that the 
holder of a dollar is entitled to the product of a cer- 
tain labor effort in the industry by which the commod- 
ity sought has been produced. What the amount of 
the product would be, would be determined by market 
price. 

Buying and selling is merely a convenient mode of 
trading commodities for one another. The price of "each 
fixes the price of the other, and the dollar is simply an 
expression of the relative amount of labor in each. 

The standard once fixed, it need never change. No 
matter how much more productive an hour's toil may 
become, it becomes no more productive relatively than 
an other hour's toil of the same quality. All values 
are relative, all remuneration is relative. No matter 
how many more wants his toil will satisfy,anv particular 
laborer would receive no more remuneration as com- 
pared with any like laborer than he does now. There 
would be so little long-time borrowing that the stand- 
ard would give no material advantage to one over an- 
other. 

Of course I recognize but two factors in production : 
the laborer and the spontaneous forces of nature. The 
latter claim no reward, the former should therefore have 
the whole product. Everybody capable of producing 
should labor, and the forces of nature should be so free 
from appropriation that they may distribute their favors 
alike to all. Distribution would soon become simple, 
and the relative remuneration of different laborers be 
the only question to be solved. 



CHAPTER XXX. 

Objections Answered — Impracticability — Deception in weight and measure^ 
Pricesof goods — Security a deterrent to trade — A refusal to sell goods after 
money had been issued thereon — Would increase the army of office-holders- 
Political corruption — A remedy for that— The development of the principle 
of local self-government— Distrust of the people and its result— The basis of 
the spoils system — The appointive power— An irresponsible judiciary— Election 
by select bodies— The Electoral College — Money in politics— Warehouse 
receipts — Security— Bonds and stocks — Goods in transit — Revenue — Silver 
and gold. 

We always find excuses for resisting disagreeable truth*. 

The first objection which is naturally directed to the 
proposed currency, is that it is impracticable. Where 
are the specifications? What particular portion is im- 
practicable? Is it the nationalization of the banks? 
The United States has found it practicable to establish 
postoffices in every village and hamlet in the land ; to 
provide officers and employes therefor and to see that 
the business of carrying and distributing the mails is 
properly carried on. The establishment of a national 
bank system would be connected with little more ex- 
pense; it would be little more complicated and it would 
be much more closely related to government functions 
than is the carrying of the mails. The United States 
now manufactures all of the currency, secures it and 
superintends its use. Under the proposed system, it 
would be asked to do no more in that respect. It has 
charge of all national bank accounts; it primarily is- 
sues all circulating notes. And for whose benefit? 
Largely for the benefit of private individuals. All that 
would be necessary in addition, is the local officers, 
with access to town, county and municipal records, so 
that the value of this or that security might easily be 
ascertained. The weighers and gaugers would be part 
of the local force. 

Banks could not possibly be more numerous than 

197 



198 A BEEED OF BARREN METAL 

postoffices, and a government capable of directing the 
work of postmasters would be capable of directing the 
work of bankers. 

The bank officers and post officers may be the same in 
small towns, and thus the expense of both services might 
be cut down. The same buildings, too, might be used 
for both concerns. 

Nearly all commodities are now stored before selling, 
and the only additional requirement would be to have 
the warehouse bonded and registered. 

All commodities must now be weighed, measured or 
estimated in some manner. The price of all commodi- 
ties must now be ascertained before the commodities 
can be sold. The storing, weighing or gauging are not 
new requirements. 

Deception in weighing, gauging or the issuing of re- 
ceipts would be difficult, as the banker would be a check 
on the weigher or gauger and the weigher or ganger on 
the banker. The warehouse man would be a check on 
both and the owner of the produce on all. Collusion 
would not help, as the amount of the money issued 
must be returned before the produce could be taken 
from the warehouse or assigned, and there would there- 
fore be no object in overestimating price or weight. 
The bond of security would make it utterly impossi- 
ble that the public should be swindled or sustain any 
loss whatever. Officials without any pecuniary interest 
in falsifying would be less prone to dishonesty than the 
officials under the present system, who have a direct 
pecuniary interest in deceiving. 

The currency would be issued on the price of the 
goods in the market at which the bank was located, in 
the quantities in which the goods were offered at the 
warehouse. Whether the price would be the wholesale 
or the retail price must depend entirely on the local 
market for the goods or their value at the banking town. 
Thus, there must in practice be a minimum amount 
of goods capable of being stored as a basis for a money 
issue. This must depend on the locality in which the 
bank operated. With agricultural customers, the min- 
imum must be as low as twenty-five dollars or there- 



A BREED OF BARREN METAL 199 

about, while in a manufacturing community where es- 
tablishments were large the limit might be much higher. 
The price would be reckoned on the lot of goods stored, 
whatever that may be. If wheat, why, wheat in the local 
market. If merchandise, stored by a local merchant, 
then the price of the goods would be the price of that 
bulk in the local market. 

In practice, no less than the minimum amount of 
goods allowed to be stored as a basis of money issue 
by any individual, should be allowed released or assigned 
at any one time Thus the storing of goods would in 
no way interfere with their sale. A merchant might 
keep his surplus stock in the bonded warehouse and 
have money issued thereon and release it in installments 
as he wanted to sell it. So might a manufacturer. 
In that way nearly the whole volume of wealth offered 
for sale might serve as a basis for currency. Samples 
alone would be required in salerooms. 

It is not necessary that every dollar's worth of goods 
shall actually be represented by a dollar in currency, 
but it is necessary that every dollar in goods may be 
represented by a dollar in currency if required for the 
purpose of exchange. Thus the volume would regulate 
itself, there would be no wealth to exchange which 
might not secure the dollar to exchange it, but if it 
could be exchanged without calling for the issue of 
currency, the exchange would be allowed. 

The warehouse receipts would not be the sole security. 
The fixed bonds would be sufficient for that, so that the 
former could be regulated so as to be readily assignable 
and cause no friction in trade. They might be issued 
in duplicate, the copy being made assignable, in order 
to facilitate trade. 

The security required could not be a deterrent to 
trade. One must give security before borrowing or 
opening a bank account. He must have a deposit to 
have his check certified. The government banks would 
ask no more before certifying orders for goods. It 
would not be necessary to give bonds for every transac- 
tion. A bond could be filed for a year or any other fixed 
period, to cover the largest amount of currency required 



200 A BREED OF BARREN METAL 

at any one time. It might be made low enough, accord- 
ing to the locality, to cover the farmer's load of produce, 
or high enough to secure the price of a steamship. If 
people would not pledge their goods that would be an 
indication that they could exchange them without it, 
while no one who had goods to pledge would be allowed 
to suffer for lack of money. 

All would get money on their goods and refuse to sell? 
That objection is puerile. Money is only a means and 
a medium of exchange. The business man wants 
money for the purpose of supplying his needs. When he 
gets the money he will at once go into the market for 
that purpose, and where buyers are there also will 
sellers be. At least that has always been the experience 
of the business world. The very first sale made would 
start the ball rolling and matters would go on just as 
at present. While each man would be obliged to pay 
insurance on his goods and run the risk of holding 
them as now, while he would be obliged to redeem 
them after a fixed period, he would be just as prompt 
as at present to take advantage of the markets and sell. 
The amount of perfect security which he could give 
above the value of his goods in store would limit the 
amount of goods which he could hoard. Each man 
would soon reach a point where he would be obliged to 
sell. 

But, it is said, the establishing of the proposed bank- 
ing system would increase by thousands the army of 
office-holders, and give spoilsmen a power for corrup- 
tion which nothing could withstand. This need not be 
the case. We have already reached a point where good 
government loudly demands a radical curtailment of 
appointing power and a making of all officials directly 
responsible to the people. Elective officers, from the 
president down, spend more time in distributing spoils 
for the reward of henchmen, or to wrongfully influence 
government, than they do in dealing with the real prob- 
lems of government. The remedy is clearly indicated 
Go back to the principles of local self-government 
Make postmasters, attorneys, judges, bankers (under 
the proposed system), and all other officers not em- 



BREED OF BARREN METAL 201 

ployed at the seat of government, elective by the con- 
stituencies which they are to serve. Make all department 
clerks elective and apportioned to congressional dis- 
tricts. 

Let us digress a moment and take a glance at the 
constitutional changes necessary, if the people would 
retain their hold even on the present governmental 
powers. 

The constitution of the United States, like all schemes 
of popular government, is founded on the ecpial civil 
rights of all men. This implies that all men shall' 
have a share in the government, and that no privileged 
class shall dictate by the right of privilege what the 
government shall be. Although the foundation princi- 
ple can not be denied by advocates of popular govern- 
ment, there were found in preparing the constitution 
of the United States, insuperable obstacles to its com- 
plete realization. A party was found, then as now, who 
distrusted the people at large and set about placing 
checks in the constitution which might, under certain 
conditions, serve to negative the will of the people or 
set aside a popular verdict. This party seems to have 
lost sight of the lesson of history: that no ruler has 
ever governed better than he was compelled to by 
popular sentiment, and that irresponsible power is in- 
variably used for selfish ends inimical to the welfare of 
the many. All power not coming from the people is 
irresponsible, all checks used to negative the will of 
the people are autocratic. They have proved mischiev- 
ous as vain. A stream will not rise above its foun- 
tain-head, and especially is this true of the stream of 
popular government. 

It was in deference to those who distrusted the peo- 
ple at large that provision was made in the constitution 
for the electoral college, the legislative election of sena- 
tors, an appointive, irresponsible, life-tenure judiciary, 
and an almost unlimited appointive power by elective 
officers. Experience has shown that these are the very 
provisions around which cluster nine-tenths of the 
fraud, trickery, corruption and dissatisfaction that 
beset popular government. 



202 A BREED OF BARREN METAL 

From the indiscriminate appointive power we have 
the spoils system, with all the attendant evils of ward 
politician, voter-corruption and encroachment of exec- 
utive on legislative power. 

From the irresponsible life-tenure judiciary we have 
shameless obsequiousness of the bench to the money 
power, the judicial trampling on popular rights, and 
bench legislation claiming supremacy over all other 
expressions of governmental power. 

To legislative election we owe a plutocratic senate, 
tainted at its very inception with the stigma of corrup- 
tion, irresponsive to the wishes or interest of the peo- 
ple, and hedged around with the impotence of obsolete 
form. 

The elective college has practically placed the presi- 
dency in the hands of a few machine politicians of New 
York, Illinois and Ohio. 

These things must be changed in the light of the 
lessons of our experience. The constitution was made 
for the people, rather than the people for the constitu- 
tion. The great authors of the document believed that 
experience would show imperfections and provided a 
means of correcting them. They recognized the lesson 
of history that if provision is not made within the 
constitution for change it will be changed by violence 
and revolution. Time has shown the imperfections of 
this wonderful instrument. Will enlightened Amer- 
icans continue, Chinese-like, to worship error because 
of its age, or try by the light of experience to make the 
instrument more perfect, more adapted to the wants of 
the present? 

I do not contend for popular government. In the. 
breast of independent manhood, liberty needs no cham- 
pion. I speak to those who deny the inherent right of 
any man or body of men to rule over any other; who 
look upon a voice in the government as a right and not 
a privilege; and who consider that civilization without 
liberty is a hollow farce, an unreal mockery. Not the 
liberty of licentiousness nor force-bred anarchy, but 
the equal liberty of just citizens, who would withhold 
from no man that which they themselves enjoy. Let 



A BREED OF BARREN METAL 203 

the man who declares a voice in the government of 
one's country to be a mere privilege, explain from 
whence comes the privilege or who has a right to give 
the privilege, or else go lay his sophistry at the feet of 
thrones, where reign the crime-polluted soi-disant 
vicars of Providence. 

Most of the necessary constitutional changes have 
already been suggested. They are opposed only by that 
fossil conservatism which persistently refuses to recog- 
nize the fact of national progress. With the race the 
idols of to-day have been the curiosities of to-morrow. 
We constantly put away the things of the child, yet a 
revolutionized civilization blindly clings to the laws 
of a lost century. 

It' is not difficult to point out these defects in the 
constitution. To all thinking men, the vast appointive 
power vested in executive officers has become a dan- 
gerous menace to popular government. It is the foun- 
dation of the spoils system, a powerful weapon for the 
subversion of popular will, a fertile source of dishon- 
esty and corruption. It is probably necessary that the 
executive be allowed to appoint his cabinet ministers 
and confidential secretaries, but here his elective power 
should end. A president would be less than human, 
or more so, if you wish, if he should refuse to use his 
patronage power in case of emergency. It has been 
done and will be done again. Patronage has forced more 
than one unpopular measure through Congress, and 
with an able and ambitious executive we might find the 
legislative branch a mere appendage to the executive. 
A congressman, unless he be made of exceptional stuff 
will not oppose a president of his own party, when he 
knows doing so will conjure up against him subservient 
enemies in every hamlet in his district. More than 
that, it will bring government hostility to his constit- 
uency, sly discrimination, which will be laid on the 
shoulders of the congressman, turning into enemies the 
very persons he has taken trouble to defend. Then 
attending to the claims of office-seekers is made the 
chief business of the executive, and multiplied obliga- 
tions arising from patronage hamper not only the pres- 
ident but every official in the land. 



204 A BREED OF BARREN METAL 

The power may be thrown back upon the people. It 
would be an insult to every American citizen to say 
that a time-serving politician, without public interest 
or personal responsibility, is a better judge of the fit- 
ness of a postmaster or other officer at this or that 
place, than the constituency which that official is to 
serve. And that is really the issue. Postmasters and 
other local officers are now virtually appointed by local 
politicians, who have gained some hold on the admin- 
istration. The president merely decides as to whose 
appointee shall have the place. Every postmaster, 
every customs or revenue officer, every district attorney, 
district judge or other court official, every mail agent 
and inspector might readily be elected by the constit- 
uency which he serves without at all interfering with 
the service which he is called upon to direct. This is 
what must happen if we are to have civil service re- 
form worthy of the name. The principle might be so 
extended that every department clerk might be elected 
by the people. 

For this purpose the clerical force of the United 
States might be apportioned among the congressional 
districts, which might be subdivided into their constit- 
uent counties. Three or more candidates might be 
elected to each vacant position as eligibles, and their 
final appointment made to depend on an examination 
intended to test their fitness for the work required. 
After the examination, the result of which should be 
made public, the eligible standing the highest should 
be given the appointment. There should be no discre- 
tion left to any one in the matter, but he who stood the 
best test examination should have the place as a mat- 
ter of law, the people's vote in electing him an eligible 
being the only recommendation required. Vacancies 
between elections might be filled from the other eligi- 
bles. These clerks might be elected for long terms, six 
or eight years, a small percentage going out at each 
election. In this manner the efficiency of the depart- 
ment forces would be improved and we would have civil 
service reform in fact as well as in name, and not the 
farce now foisted on the American people. A more 



A BREED OP BARREN METAL 205 

imporian consideration than this, we should not have 
a class of life-tenure officials, living as sort of benefi- 
ciaries of the government and entirely out of sympathy 
with work-a-day citizens. These life-officials come to 
have interest in but one thing — self, and are ready to 
give temporary allegiance to any politician who might 
lend them assistance. They know little and care less 
about the condition of the country at large. They 
make the very poorest and least public-spirited citizens. 
And as for the efficiency which comes from long 
service, it is not readily apparent, It is notorious that 
the want of ambition and disposition to -shirk duty de- 
veloped by long official service, makes the majority of 
long-serving clerks less valuable than men of little ex- 
perience in official life. Let public servants in all ca- 
pacities frequently touch elbows with the rank and file 
of citizens. It will be found better for all concerned. 
Let each one's official record go before his electors once 
in a while. It will have a salutary effect. The clerk 
would gain, as he would have a fixed term of employ- 
ment and not be placed on the anxious seat every few 
months. 

With such an official force as this, multiplicity of 
forces would be no objection to the nationalization of 
banks, railways or anything else. Besides, it would be 
a reform which must be had to save popular govern- 
ment. 

The actions of federal judges furnish most flagrant 
instances of the mischief of giving official autocratic 
power. We have a sort of tacit legal fiction that a 
judge, like a king, can do no wrong. Hence we have 
made him utterly unaccountable. for his actions,for im- 
peachment is but a sort of pretentious joke. He is 
created by one man with the consent of a body of men, 
themselves thoroughly undemocratic, and when once 
installed is superior to his social creators. And who 
was this paragon of perfection before he ascended the 
bench and put on the obsolete insignia of autocratic 
authority? A mere lawyer who for money warped and 
blocked the laws of his country to further the selfish 
or iniquitous schemes of his employers. He was prob- 



206 A BREED OP BARREN METAL 

ably the hired and obsequious servant of some corpora- 
tion whose profit was wrung from wrongful levies on 
the toiling public. He was certainly no more honest, 
upright or disinterested than other men, and, no doubt, 
often drafted and advocated the passage of laws for the 
special purpose of making them dead letters or using 
them to his own and his employer's ends when they 
came to be enforced. 

Is it any wonder, then, that the judge, hedged around 
by antiquated forms and illogical precedent, should 
continue in his contempt for the rights and interests of 
the people and persist in serving the special interests 
which have created his fortunes? Is it any wonder that 
the plainest intention of the people is negatived by 
the judicial dictator and that corporations laugh at 
legislative enactments from behind judicial strongholds? 
Nobody expects perfection in a lawyer. The ermine does 
not transform him. Often the realization of his ambi- 
tions depends on how well h.p serves — some corporation. 
There is but one remedy. Make judges of all sorts elec- 
tive by the people for limited terms and therefore ac- 
countable to the people. If the people are capable of 
selecting law-makers, they are capable of selecting law- 
interpreters. But whether they are capable of so doing 
they must judge for themselves. They have a right 
to have their verdicts enforced regardless of the opin- 
ions of the few as to the wisdom or folly of these ver- 
dicts. And in practice courts have not been found to 
suffer where judges were made elective rather than ap- 
pointive, but, on the contrary, laws have been more 
intelligently and justly administered. The corrupting 
influence of the appointing power on the judiciary of 
this country is notorious. To our shame be it said, the 
highest tribunal in the land has been bartered as a re- 
ward for corrupt help of corporations, or for upholding 
the wrongful acts of partisans. But worse than all this. 
the appointive judiciary has been gradually absorbing 
the legislative power, until the country is overwhelmed 
with a melange of judge-made law. If democracy is 
to survive it must clip the judicial wings, elect judges, 
and make them accountable to the people; in a word, 
abolish judicial dictatorial power. 



A BREED OF BARREN METAL 207 

The United States Senate, instead of being the lofty, 
single-minded institution intended by its founders, the 
institution which was to leaven with wisdom and hon- 
esty the crude, passion-laden measures of the popular 
branch of government, has become the most ignorant, 
corrupt and inefficient branch of the government. Its 
actions are more often tainted by suspicion of wrong 
or dictated by motives of self-aggrandizement or con- 
tempt of popular rights, than they are illumined by ex- 
perience, wisdom or patriotism. Experience has most 
emphatically proved that those who distrusted the wis- 
dom as electors of the people at large, were entirely 
mistaken. 

We have found in practice that the members of the 
state legislatures are no more incorruptible, if indeed 
more wise than the average citizen-voter, and the num- 
ber is so small that it is feasible for moneyed interests 
to purchase an election of them. The fundamental 
mistake is the supposition, negatived by one hundred 
years of history, that any select body of electors is less 
corruptible and wiser than the electors at large. The 
remedy is, then, suggested by history. Make the Senate 
elective by popular vote and it will cease to be a mil- 
lionaires' and corporation counsel club, and become a 
useful branch of the government. One can always attend 
to his own business better than any one else will, and 
this is true of the business of the whole people as well 
as an individual. Make all officers responsible directly 
to the supreme law-making power, if you would have 
the will of the citizen carried into effect. 

The electoral college has not, for nearly a century, 
had anything to do in practice with the purpose for 
which it was established. It was another case of dis- 
trusting the verdict of the citizens at large, and speed- 
ily grew into the most ridiculous farce ever exploited 
in the name of popular government. It is now the tool 
of the New York machine on either side, and gives 
power to a handful of politicians in that state to dic- 
tate a president to sixty-five millions of people. The 
convention of neither party dares ignore the New York 
machine in the make-up of the presidential ticket, for", 



208 A BBEED OF BARREN METAL 

so far as ante-election estimates are concerned, as New 
York goes so goes the country. The consequence is 
that the Republican and Democratic machines of the 
Empire State nominate the tickets for both conventions. 
Let the people elect a president by a direct, popular 
vote, and political parties would cease to bid for the 
support of pivotal states. A million of voters in the 
Mississippi valley would have as much to say in the 
election of a president as a million of voters in New 
York. Political dictators would find a large part of 
their occupation gone. Presidential candidates would 
be chosen more with regard to fitness for the great re- 
sponsibility than to propitiate this or that politician, 
or this or that special interest in a pivotal state. The 
will of the people would be carried out as expressed, 
real majorities would rule, and not crude approxima- 
tions thereto. 

The practical politician is an egoist, so are the inter- 
ests which he serves. He manipulates politics for gain, 
for himself and for his masters. His effort to control 
a political situation is measured by the probable return. 
It is a money and time investment for a money return, 
what we call "strictly business." The politician or the 
agent of special interest supports a candidate for office 
with the understanding that there shall be a return serv- 
ice. The value of that service depends largely on the 
length of the term for which the officer is elected. 
Hence a practical politician will invest more in an 
officer elected for two years than for one, for four 
years than for two, for six years than for four, and, 
in general, for a long term than for a short. Other 
things being equal, the amount of money invested 
in election is directly proportional to the term of 
office to be filled. A certain policy extending over 
four years will yield greater return than a like policy 
extending over half that time, and at the end of four 
years there is a better chance to continue that policy 
than there is at the end of two. On the other hand the 
official elected for a long term is more independent of 
the citizen electors and less responsive to their will. 
He knows that the money power is with him, as wealth 



A BREED OF BARREN METAL 200 

always dreads change. To drive money out of politics 
and secure a sure and prompt response to popular will, 
all the terms of all important officials should be short- 
ened by about one-half. No more should be paid for 
the work of minor officials than is paid for the same 
class of work by private individuals. There would then 
be no profit in manipulating politics, and the practical 
politician is not the sort of man to waste time and 
money without return. 

There would be no upsetting of business by frequent 
elections, as is often claimed. The very opposite would 
be the effect. The tenure of party would become so 
uncertain that every citizen would make it his business 
to see that the candidates of all parties were trustworthy. 
The officers who would really represent the voter would 
have his confidence. Each election would not be a peri- 
odic contention of special interests causing a periodic 
crisis of suspense in business interests. Politics and 
business would find it necessary and profitable to go 
on together. 

To be sure, with the initiative and referendum, mi- 
nority representation and other like reforms, short 
terms would be less imperative, but as a means of avoid- 
ing the use of money in politics and preventing peri- 
odic business upheavals while awaiting an election 
crisis, they would he invaluable. Anything tending 
to break down partisan power and make minorities re- 
sponsible, would be a boon. The minority would then not 
seek to make the laws of the majority as bad as pos- 
sible in-order to cause a revulsion of feeling and a 
return to power of their party 

This is in the nature of a digression, but still ger- 
mane to the principal subject. These reforms must be 
made sooner or later, whether we nationalize the bank- 
ing system or no, and if they are made, the only valid 
objection to extending the powers of government would 
vanish. Where the government is really and truly the 
people, there is nothing which the people wish to do 
that they cannot legitimately do without violating 'a 
single principle of individual rights. It is only to 
governments extraneous to the people that the criti- 



210 A BREED OF BARREN METAL 

cism of the clanger of too large an assumption of the 
power of the government holds valid. 

To rekirn to our principal theme, the proposed ware- 
house receipts might be made in amounts large enough 
in no way to obstruct sales and still give every one the 
advantage of the accommodations of the bank. The 
warehouses need not be different from the bonded 
warehouses of to-day; the duties of inspectors, gaugers 
and weighers would be less difficult than the duties of 
our present custom and revenue officers. 

The receipts, as slated, might be issued in duplicate, 
so that the bank may retain the original, while the du- 
plicate could be made negotiable, thus accelerating sales. 
The duplicate should, however, be made simply an evi- 
dence of ownership of the original, and the original 
alone should be the instrument on which the goods 
could be drawn. 

Security other than the goods for sale would be re- 
quired of each patron to the full amount of his bank 
credit, to secure the bank against possible fraud in 
weighing or inspection of the goods, and to enforce the 
requirement that the goods should be sold by their 
owner, thus relieving the bank of all unnecessary 
trouble or responsibility. When the goods were sold 
the credit would be canceled to that extent, and a vol- 
ume of money corresponding to the goods sold would 
be withdrawn from circulation. 

Bonds and stocks and evidences of credit may very 
properly be taken as security, but no money should be 
issued on them, for the simple reason that they are not 
wealth. That is the fatal weakness of all money sys- 
tems so far devised. The volume of the debts of the 
United States as a nation has no necessary relation to 
the current business of the country and hence to the 
volume of currency required. The volume of public 
debt or even private securities has no more relation to 
the exchanges of the country than they have to the nec- 
essary transportation facilities. A money founded on 
them is entirely without a criterion as to volume. It 
may be twice too large in amount and may not be half 
large enough. And besides, a money founded on wealth 



A BREED OF BARREN METAL 211 

could not be hased on evidences of indebtedness. It 
would be paper founded on paper, not wealth in any 
sense. In the sale of a railway or a piece of real estate, 
to be sure, the instrument of title could be taken as 
evidence of ownership, and be treated as such. 

In practice it would not be found difficult to make 
goods in transit the basis of bank credit, so that com- 
modities intended for a distant market may be for- 
warded to that market and at the same time serve as the 
basis of a money or credit issue. The intimate com- 
munication of the banks with one another and the ease 
with which the carrier may be made to serve the pur- 
pose of the bonded warehouse, would make such credits 
especially easy to arrange. The details need not be 
given. 

Of course the banking system would not be a money- 
making concern, and a small percentage on business 
transacted would give a revenue sufficient to pay rents, 
clerk hire, and cost of printing books and notes. 

There could be no objection to making deposits of 
currency the basis of bank credit. 

It would be introducing no new principle to give the 
government through its banks full control of the issu- 
ing of all money, and the making of what it chose legal- 
tender. The so-called precious metals must cease to 
exist as legal money before any reformed currency 
would be perfectly successful. Otherwise private con- 
tracts wrung by the controllers of gold would force the 
currency back to a metallic basis. Of course gold and 
silver, like other wealth on the market, should be 
allowed to become the basis of a money issue, but 
merely at their market price. 

For the convenience of foreign trade as well as for its 
own protection, the government would continue to 
weigh, test and stamp with assay mark, gold and silver 
bullion. This would make the bullion as readily nego- 
tiable in foreign trade as our present coins. 

It would probably-be necessary at first to give the gov- 
ernment a legal monopoly of the banking, as it has of 
the postoffice business, but this necessity would, in time, 
pass away, as there would be no occupation for private 
bankers. 



CHAPTER XXXI. 

Objections Answered— Why it is necessary to have a special form of currency 
for the purpose of preventing interest-taking — Prohibitive statutes — Reasons 
why they are so often ineffective— The proposed regulation not a prohibitive 
statute in the sense that other usury laws are — Prohibitive statutes not always 
ineffective — The testimony of Bentham — The statute of Queen Anne — Testi- 
mony as to effectiveness — The sort of a usury law which would not be ineffec- 
tive — Specific provisions — Has the state a right to regulate contracts between 
citizens?— It is done every day — Bentham — Hoarding money — How it may be 
prevented — Specific provisions — Adam Smith — All interestwrong — The borrow- 
er's profit — Will interest-taking cease of itself?— Is interest falling? — Is risk 
the basis of excessive interest?— Observed facts. 

Many men prefer doubting to understanding. 

With a perfect national banking system such as pro- 
posed, commercial loans would be entirely done away 
with and but little interest, comparatively speaking, 
could be collected. But currency is generalized wealth, 
or rather an order for any sort of wealth on demand, 
and it is not subject to the universal law of wealth, the 
law of decay and final destruction. It is not bulky, 
not difficult to protect. Hence where the demand may 
be made at any time for an unlimited period, and the 
face value collected, the currency would be more ad- 
vantageous for hoarding than any form of wealth, and 
the receivers of surplus incomes would withdraw it 
from circulation and hoard it for future use. It would 
represent a demand not made and hence that amount 
of goods would remain a glut on the market. Demand 
and supply would be so far unbalanced. The hoarders 
of currency would shift the burden of wealth deteriora- 
tion on some one else. They would finally hold enough 
currency to derange trade somewhat and make it neces- 
sary for others to borrow at interest, even in commer- 
cial transactions. They would lend at interest to new 
enterprises It is to obviate this that I suggest the 
specific laws against interest-taking. 

212' 



A BREED OP BARREN METAL 213 

It has become fashionable to assert that prohibitive 
statutes or statutes limiting the amount of interest taken 
are not only ineffective but mischievous. Even if this 
were true it would have nothing to do with the pro- 
posed prohibitive statute. The trouble with usury laws 
so far, is that they have been mere acts of expediency 
founded on no principle whatever. No moral turpitude 
attaches to the taking of interest to any amount. If it 
is not wrong to take six per cent interest when one can 
get that much and no more, it cannot be very wrong to 
take ten per cent interest when one can get that amount. 
If taking ten per cent interest is not wrong in California 
it is not wrong in New York. The laws recognize in- 
terest-taking as right and fix a sort of barrier lest too 
much right should make a wrong. It would be as sen- 
sible to regulate the amount of beating which one 
citizen might give another without making himself 
amenable to the law. 

Again the legislators who pass these laws, the law- 
yers who draft them and the judges who are called upon 
to enforce them, believe in the divine right of every 
one to take all of another's goods that he can get, and 
evade the law. In short, the laws are wrong in concep- 
tion, inadequate in provision, and untrustworthy in 
enforcement. 

Yet with all of their imperfections, these laws, when 
honestly administered with the intention of suppress- 
ing what was thought to be excessive interest, had a 
very marked effect. The Queen Anne statute of usury 
was rarely evaded, and succeeded in cutting down the 
ordinary rate of interest to five per cent. It was repealed 
on sentimental principles of what was posited as free- 
dom of contract rather than from any inefficiency or 
hardship due to the law itself; and its repeal worked a 
hardship on all except those with the very best credit. 
Of this law Lord Mansfield said, "Where the real truth 
is a loan of money, the wit of man cannot find shift to 
evade the statute. " In controverting the opinion of 
Dr. Smith, that no Jaw can reduce the rate of interest 
below the ordinary market rate, Mr. Bentham in his 
"Defense of Usury" says: "As to the general proposi- 



214 A BREED OF BARREN METAL 

tion, if so it be, so much, according to me, the better, 
but I must confess I do not see why this should be the 
case. The evasion of the French law might be due to 
a defect in penning that particular law, or in the pro- 
visions made for carrying it into execution. In either 
case it affords no support to the general proposition. 
For the position to be true the case must be that every 
law would still be broken, even after every means of 
what can properly be called evasion has been removed. 
For destroying the law's efficacy altogether, I know 
of nothing that could serve, but a resolution on the 
part of all persons any way privy, not to inform. In 
England, as far as I can trust my judgment and the 
general recollection of the import of the laws relative 
to this matter, I should not suppose that the above 
proposition would prove true." 

As a matter of fact, Bentham was right. Real estate 
mortgage loans never, while the statute was in opera- 
tion, drew more than five per cent interest, while it 
was proved before the committee of the Commons who 
investigated the matter in 1818 and the committee of 
the Lords who investigated it in 1841 that the market 
rate of interest had frequently been more than five per 
cent during that period. Never did bond or note for 
the century and a quarter during which that law held 
sway, bear more than five per cent interest. Mr. Byles, 
in his work on usury, quotes Mr. Gurney, an eminent 
English bill broker of the time, as saying: "I consider 
the evasion of the usury laws to be partial. I am of 
the opinion that the lender of money was obliged to be 
satisfied with five per cent and that the borrower has 
got it at a more reasonable rate in consequence of the 
law." The same author quotes Mr. Kempble, an exten- 
sive produce broker, in business for more than thirty 
years,as saying, "I am not aware of any practice among 
merchants to avoid the usury laws, or attempt to avoid 
them." The testimony of Mr. Gibbs, the great annuity 
dealer, is in the same line, and is corroborated strongly 
by Mr. Maynard. 

I cannot go into the history of legislation against 
usury at length, but I have quoted far enough to show 



A BREED OF BARREN METAL 215 

that where laws against excessive interest were made 
to be enforced, and the people concerned wanted them 
enforced, they were enforced, at least as thoroughly as 
any other law. We would not think of repealing laws 
against stealing or fraud because such things are still 
practiced, yet if the argument of ineffectiveness is good 
in one case it is in the other. 

Make a usury law founded on the theory that interest- 
taking is wrong in itself — a crime. Draw it so that it 
will be difficult to evade, and support it with a public 
sentiment as strong as that against stealing, and we 
would have no trouble in having the law enforced. 
That is what I propose. There are people who have 
such a mistaken idea of honor that they will refuse to 
bring to justice the sharper who robs them. There are 
others who would suffer rather than have it known that 
they are dealing with usurers, but these are a small 
percentage. If half of the forfeited debts should go to 
the informer and half to the state, self-interest would 
largely provide for the enforcement of the law against 
those who loaned surreptitiously. 

The provision making loans between private parties 
uncollectible unless made through the government 
bank would make the evasion of the law by subterfuges 
entirely impossible. The bank officers would deliver 
the instruments of security to one and the money to 
the other, and could easily see that there were no de- 
ductions. This is no more than we now compel in the 
transfer of real estate. It has to be done in a certain 
fixed way to make it valid. A watch over the contract 
of loan is just as important. 

Here again we meet with the objection of Bentham 
and others that the state has no right to interfere in con- 
tracts between individuals and that its interference 
always works evil. Our government is constituted 
largely for the purpose of protecting the weak from the 
aggression and wrong of the stronger, and anything 
which will do this is certainly within the province of 
government. Our sanitary laws, our coinage laws, our 
laws against adulteration of foods, our statutes against 
fraud, our statutes against gambling, our regulation 



2K5 A BREED OF BARREN METAL 

of rates for carriers, and thousands of other laws are 
made to interfere in individual contracts in behalf of 
the less wise, less cunning, or the weaker party. If 
government is not going to give greater security to 
citizens in their rights, then government has no excuse 
for being. And so far as being an interference with 
individual rights, it is no more an interference with 
the rights of citizens to prevent them being defrauded 
by usury than it is to prevent them from being robbed 
by force. On the other hand, no one has a right to 
wrong another. And in a government of the people, 
who is the judge? Who is to set limits as to what the 
people choose to do in their corporate rather than in 
their individual capacity? Certainly no one but the 
people themselves. If they think their interest can be 
better protected by preventing one man from taking 
advantage of another, they have certainly the right thus 
to protect them. No man has a right to become the 
object of a wrong, and it is absurd to say that you in- 
vade one's rights when you protect him from wrong. 
And the law could not even be passed without the sup- 
port of popular sentiment. Anything which will better 
the relations of man to man is the province of govern- 
ment. 

It is scarcely necessary to go further in answering 
the apologists for usury. Bastiat is the only one who 
has gone at all into the philosophy of the subject. He 
has been effectually disposed of. Ben'tham goes no 
further than to show the inconsistency of the average 
laws against usury. He says that as the percentage of 
interest charged must depend upon circumstances, 
where it is right under one set of circumstances to 
charge five per cent it is equally just under other 
circumstances to charge ten. Where we make an in- 
flexible rule we work injustice. If six per cent is not 
wrong, ten per cent can not be very wrong. Such ar- 
gument has no force with one who denies the right of 
any borrower to take any interest whatever and consid- 
ers one per cent or ten an unwarranted extortion and 
moral wrong. 

Bentham thinks that laws against usury are further 



A BREED OF BARREN METAL 217 

inconsistent in preventing interest on money and allow-, 
ing hire for the use of all other sorts of wealth — rents 
for houses, etc. There is truth in that position. It is 
inconsistent, but the proposed scheme does not embrace 
that inconsistency. It denies the right to take increase 
for any sort of wealth, "for anything that is lent upon 
usury." 

Then Bentham says that a certain class of borrowers 
in desperate circumstances will, under laws against 
usury, be obliged to go to the wall at once and not be 
able to prolong their business career until the usurer 
has all of their property and the rest of their creditors 
are left without recourse. This is the real substance 
of his argument about the impossibility of persons bor- 
rowing with little or no security. There is no hardship 
in that. Without usury laws such persons will be 
charged rates which no business can stand longer than 
a few months, and their property will go to the money- 
lender. It would be better for all concerned if they 
could not borrow at all. Then their property would 
be saved for their legitimate creditors. Under the 
proposed system, no one with security to give need want 
for money. 

If money may be hoarded with impunity it will be 
hoarded, for reasons given above. The only way to 
prevent such an outcome is to make a currency the hold- 
ing of which is no more profitable than the wealth 
which it represents. Nothing hut a time-limit currency 
could be made to deteriorate with holding beyond a cer- 
tain limit without impairing the use of that currency as 
a circulating medium. With a time-limit currency,the 
whole volume issued during a corresponding period must 
go back to the bank of issue before the time-limit ex- 
pires. Those who simply used their money for hoard- 
ing could then be taxed an amount sufficient to make 
up for the deterioration of the wealth represented by 
the money they held. They would then use their cur- 
rency or lend it without interest, and save the amount 
of the deterioration tax. 

It would be entirely feasible to stamp notes with the 
date of expiration so that any one able to read currency 



218 A BREED OF BARREN METAL 

could tell the date. The money obtained in the regular 
course of business by persons holding bank credit on 
goods would be redeemed as a matter of course in the 
currency of current issue. The currency should be 
legal-tender for debts up to the time of its becoming 
non-current and hence it could not be discriminated 
against. The low limit which would be set to the 
amount redeemable free of charge for any one person, 
coupled with the requirement that all currency pre- 
sented for redemption should be left at the bank until 
the period of redemption had expired, would make it 
impossible for the holders of large amounts of currency 
for hoarding, to have their holdings redeemed piece- 
meal. On the other hand, it would relieve from loss 
wage-earners and small shop-keepers who did not carry 
bank credit and received the currency in the course of 
business, and thus prevent the currency from being 
discriminated against in trade as well as in paying fixed 
debts. Experience would teach the proper limit for 
the free redemption of currency. It may be fifty and 
it may be two hundred dollars. In practice nearly the 
whole of any issue would be taken up before it became 
non-current. 

This provision is, of course, for the purpose of pre- 
venting any one from hoarding currency, and compel- 
ling the holders of surplus to lend it without interest. 

A charge of percentage on deposits would be for the 
same purpose. It would make the holding of currency 
as expensive as the holding of real wealth. Where one 
held wealth as the basis of his bank deposits or credit, 
it would be manifestly unjust to charge him a percent- 
age on his credit as well as compel him to take care of 
his wealth. This provision would place the holders of 
mone} r on the same footing as the holders of wealth, 
nothing more. 

After the days for redemption at par had expired, 
then the non-current notes hoarded would gradually 
lose their valuejust as the corresponding wealth would 
deteriorate until they would become worthless in time, 
just as wealth does by holding out of use. 

Adam Smith did not go into the philosophy of inter- 



A BREED OF BARREN METAL 219 

est-taking. He seemed to think that competition be- 
tween lenders would be sufficient in older countries to 
keep down the rates of interest to a reasonable figure. 
Pie seemed to forget that most of the competition is on 
the other side, among the borrowers, and that the rule 
among bankers and financiers generally is close and 
effective combination. His arguments against limiting 
contracts are the stock article already noticed. 

But even if interest were lowered to the legal rate of 
most countries it must still be an extortion. If wealth 
does not make wealth, as I believe I have proved it 
does not, then the taking of any increase is unreasona- 
ble, and we have never come to the point where money 
was loaned for nothing. But say Smith and many 
others, the borrower makes a profit on this borrowed 
wealth, even after paying interest. So much the worse. 
Where does his profit, including the interest, come 
from? The wealth used to pay a profit did not make 
itself, it must have been earned by some one. If not 
by the borrower, then by some one else to whom it would 
rightfully belong. The very term "profit" implies unjust 
advantage. It is gratuitous gain for which no return 
is given. Before we reckon net profits we deduct all 
legitimate expenses and then we have left a shave, an 
advantage wrung by the cunning of some one from the 
labor of another. All profit is really interest, but as it 
cannot be attacked directly we must try to reach it 
through the medium of interest on money loans. The 
currency system is the key. 

It is very generally but very gratuitously asserted 
that we shall finally reach a point where abundance of 
capital will make interest merely nominal. Let us see. 
According to the Old Testament, usury taken by usu- 
rers among the tribes of Israel often amounted to not 
more than one per cent. We have no record of interest 
being so low afterward. 

Interest in Rome during the empire was down to four 
per cent. The average interest in America to-day on 
perfect security for moderate periods is six and one- 
half per cent. Slow progress this toward no interest. 

There are instances of interest being so low as three 



220 A BREED OF BARREN METAL 

per cent in England one hundred and fifty years ago. 
It was even lower in Holland before that time. At the 
time of the passage of the Queen Anne usury statute, 
five per cent was considered the largest amount which 
should be taken in interest. In not one of these coun- 
tries can cheaper loans be had to-day except on very long 
time. Government loans are exceptional. They carry 
with them a sort of assurance that in rapidly changing 
conditions the man of wealth will not be disturbed for 
at least a long period. Where one is so enormously 
wealthy that a small percentage will give him an all- 
sufficient income without any trouble whatever, he nat- 
urally prefers such an investment to a better paying 
one without the assurance and with the element of 
personal exertion. Then, government bonds not being 
subject to taxation, the net interest charge on money 
loaned on them is not so very different from that loaned 
on other property. 

We are constantly told that interest in this country 
is gradually falling. As a matter of fact, it has increased 
pretty steadily since 1880, if not since 1873. Accord- 
ing to the mortgage researches of Carrol D. Wright, 
the nominal interest on farm loans has decreased one- 
tenth of one per cent since 1880. The nominal inter- 
est on lot mortgage loans has decreased a little more 
than three-tenths of one per cent in the same period. 
According to the calculations of experts, gold has in- 
creased in value between fifteen and twenty per cent 
during that time. At the lower figure the real interest 
charged for farm and lot mortgage loans in 1890 would 
exceed the real interest paid on such loans in 1880 by 
about one per cent. For all interest is contracted for 
and paid on a gold basis. This will put the average in- 
terest on land mortgage loans up to eight and one-half 
per cent, a formidable figure.* 

If we apply the same test to government loans, we 
shall find that our advantage is not nearly so marked 

*As the average period of a loan is about five years instead of twenty, the 
actual increase of real interest rate due to the appreciation of gold is but one- 
fourth that given in the text, but this is sufficient to more than counteract ap- 
parent reduction inrate. Besides, when the principal comes to be paid, from 
one and one-half to two per cent per year is added by reason of money-unit ap- 
preciation. 



A BREED OF BARREN METAL 221 

as one might imagine. Economist McCulloch says, in 
a note to Adam Smith's "Wealth of Nations, "that it is 
doubtful if a lower rate of real interest is paid in Eng- 
land to-day than was in barbarous times. The same is 
true everywhere as a general proposition. There are so 
many laborers on the verge of starvation and their com- 
petition for the use of wealth so fierce that it is impos- 
sible, under present conditions, to have interest 
materially fall. 

Others, again, learnedly divide interest into risk-pre- 
mium or insurance and interest proper and maintain 
that while interest proper is everywhere, in this coun- 
try, practically the same, that risk-premium gets the 
rates distorted entirely out of proportion. It is a very 
good explanation except that it is contrary to facts. 
As regards a certainty of having the money of the bor- 
rower refunded, real estate mortgages are the most per- 
fect sort of private security in general use. Real estate 
is not mortgaged for more than one-third to one-half of 
its market value; in fact the figures of the government 
bureau of statistics put the percentage much lower. 
The entire cost of making the loan is borne by the bor- 
rower, including all brokerage and commissions. Where, 
in the name of common sense, is the risk? Yet when 
money could be had by the government and some fa- 
vored corporations for three and one-half per cent, six 
to nine per cent was being charged on mortgage loans. 
In modern transactions of the more legitimate sort, 
risk has nothing to do with the rate of interest. The 
security is believed to be perfect and is perfect usually 
before the loan is made, except in the case of five per 
cent a month sharks entirely beyond consideration. 
And even these seldom lose. 

There are two or three reasons why interest rates 
vary. Our financial system and financial policy tend 
to mass all surplus wealth in a very few commercial 
centers of the East. Here it is remote from a mass of 
borrowers on mortgage security, its possessors know 
nothing of and care less for the condition of the users 
of the surplus and allow their wealth to seek more or 
less remote markets onlv on the condition of offers of 



222 A BREED OF BARREN METAL 

large gain. For the mass of borrowers there is abso- 
lutely no competition among lenders. They cannot 
afford to go into the money markets of the East and 
bid, and are at the mercy of an agent who dictates rates. 
On the other hand, the United States government can 
go into the markets of the world and receive the benefit 
of world-wide competition. The same is true in a less 
degree of all large organizations. 

Again, the extremely long time which government 
and like loans run, give them a permanence which is 
everything with the great ease-loving capitalist. He is 
sure of a certain amount for a large portion of his life- 
time, while, if he had to renew every five years, who 
knows what changes might take place in the meantime? 
Then at present government bonds are so convenient as 
a basis for money-making banking enterprises, and are 
exempt from taxation. 

Any observer may verify these statements for him- 
self. During the financial stringency of 1893 a loan 
was sought on a piece of land inside of Fourteenth 
Street and between Mill Creek Valley and Olive Street 
in the city of St. Louis. As is well known by all ac- 
quainted with the city, and as may be verified by any 
one with access to a St. Louis map, this land was but 
just outside the most active business portion of the city 
and there was no possibility of its deterioration in 
value. It was worth then, would sell at auction for, 
twice the value of the loan asked. Yet the loan was 
refused at eight per cent Call loans were made in 
New York that week at a figure scarcely above the aver- 
age. Was it the risk in the premises which put up 
the rate of the St. Louis loan? Not at all. It was the 
manipulation of the money market, and the massing of 
the bulk of circulation away from the localities where 
it was needed. This is a typical, not an isolated case, 
and the city named was probably less distressed in that 
way than any other city in America during the recent 
panic. The risk explanation has not a leg to stand 
on. It is a mere trick of usurious ingenuity, unthink- 
ingly adopted by economic writers. It might have 
some force at times of governmental insecurity or in 



A BREED OF BARREN METAL 223 

early periods of violence. It certainly has not at pres- 
ent. The man who loans at ten per cent on the Minne- 
sota farm is as sure of the return of his capital and 
interest as the man who invests in government bonds 
at three per cent. 



CHAPTER XXXII. 

Interest-Taking and Wage-Earners — The conclusion — But one way of in- 
creasing wages — Must strike at unearned incomes — These must be reached 
through interest-taking — Capital profits unearned— Something for nothing — 
The laborer and Malthus. 

If Reginald gets something for nothing, Jonathan must 
give something for nothing. 

To the reader who has followed me through these 
pages, it is by this time clear that interest-taking is 
wrong in itself. It is also clear that interest-taking is 
at the bottom of much of the industrial wrong and fail- 
ure experienced in the world. I have pointed out a 
means of avoiding that wrong. The only help for the 
oppressed industrial workers is to adopt this or some 
equally effective means of destroying interest-taking 
and placing the world on a just and sound industrial 
basis. 

We have seen that with the present effectiveness of 
machinery, there is but a limited product to distribute 
between the toiler, landlord, and the capitalist. If the 
toiler would get more the others must get less. The 
others do not earn what they get. The laborer has 
earned a right to all that is left of the gross product 
after keeping up capital. If he would increase his wages 
he must take what he is entitled to. There is no magic 
by which larger wages, as well as larger profits, can bo 
paid out of a fixed product, or a product increasing 
only in proportion to the march of civilization and 
population. The laborer must realize this and strike 
at the root. All unearned incomes are founded on rent 
and interest-taking. Any unearned income makes the 
wages of the laborer less, for it is getting something for 
nothing. It is at unearned incomes, then, that the la- 
borer must strike and the place to strike at them. is at 

224 



A BREED OP BARREN METAL 225 

their foundation. He must destroy rent and interest- 
taking by private individuals if he would better his own 
condition. As for earned incomes, they can never be 
a harm to any one who earns what he gets, for they im- 
ply that the receiver gives full value in return. There 
are no incomes earned by wealth. All that is earned 
must be earned by human labor of hand or brain. The 
cutting off of all incomes from other sources must take 
place before those who labor will get all that they pro- 
duce, and this can be doneonly through the destruction 
of interest-taking. 

In a just industrial organization there can be no such 
thing as capital profits. Profits mean something for 
nothing. They mean that after one is paid for all out- 
lay and all services, he is paid something extra, for 
nothing, a sort of bonus, an advantage over those with 
whom he is dealing. It would be impossible that all 
should have such an advantage. One must get the ad- 
vantage from those with whom he deals, and if he gets 
something for nothing, some one else must give up 
something for nothing. A rule of economics which 
cannot be generally applied is defective. A rule which 
posits gain for one- at the expense of others, is unjust. 
The laborer, from the nature of things, gets no profit. 
He gets but his hire, just what he works for, and that 
is but a portion of what his labor produces. He never 
can get profits, for he will never be given more than 
his labor produces. Non-laborers are capitalists or 
landlords, and it is they who must get the profits. 
The laborer produces all wealth, for wealth does not 
make itself, and hence must pay to the landlord and 
capitalist their profits. Profits are founded on interest- 
taking. They are founded on the assumption that 
wealth is in itself productive, and for that reason goes 
to the possessors of wealth alone. They can be de- 
stroyed only by destroying interest-taking and making 
all persons workers. Present laborers must have help 
to bear their burdens. 

This is the salvation of the laborer. It is the task 
which he must perform if he would save his industrial, 
and finally his political independence. Strikes are 



226 A BREED OF BARKEN METAL 

as extravagant as foolish. Let him learn just what he 
wants. Let him then make a specific programme and 
insist at the polls that it be carried out. After the 
political changes which I have suggested, the govern- 
ment will be his. Let him use it. It is his only hope. 
Concentrate on one principle at a time. Let- every one 
who labors support it, and the laborer will bood have 
his rights. 

It is said that well-fed laborers, according to the 
Malthusian doctrine, will increase so fast that their 
progeny will soon overrun the earth and th< j over-crowd- 
ing will make them as pool- a- ever — thai population 
will always outrun subsistence. That is a doctrine full 
of unction to the top dog, the apologist for the system 
that exists bu1 it is contrary to experience. Observed 
facts teach us that with the human family, the best 
fed, most prosperous and intelligent, increase more 
slowly, and the best check to population is to make the 
whole race prosperous and intelligent. It is needless 
to cite instances. It is a matter of common observa- 
tion. Lei the toiler destroy interest-taking and organ- 
ize industry on a just basis, and he can all'ord to be 
indifferent to consequences. Right never produces 
wrong. 



CHAPTER XXXIII. 

A Feasible Currency System— Some of its advantages— A destroyer of usury- 
Vested interests— Our reform friends— The single-tax— Its theory and practice 
—The dilemma of the assessor— Exchange value of land— Land reform not a 
panacea— The single-tax theory from a philosophical standpoint— Land and 
minerals— The postal savings bank. 

There is room for him and for me. 

Here, then, is outlined a thoroughly scientific and 
feasible currency system. A system which will respond 
to supply and demand as readily as the mercury in the 
thermometer does to changes in temperature. A cur- 
rency which will be perfectly stable as to unit of value, 
which cannot contract so as to produce scarcity, which 
cannot expand so as to produce over-supply. There 
are no untried principles introduced. The proposed 
currency is founded on value, and the volume is regu- 
lated by business needs. It will be neither for gold-bug 
nor silver-bug nor paper-bug. It will be a scien- 
tific currency, recognizing the fact that we have gone 
beyond the stage of barter and can stamp orders for 
wealth on articles of no intrinsic value. 

It may be put into effect immediately with less ex- 
pense and less friction than would be encountered 
in changing tariff or revenue laws. The value of the 
precious metals which it would take from sequestration 
would bear the expense of the new system twice over. 
Banks could be allowed to close up their business grad- 
ually and there need be no panic except of their own 
making, which would recoil on their own heads. 

We would be relieved of the incubus of gold-worship 
and our civilization and prosperity would be allowed 
to expand beyond the gilded fetters which at present 
bind them. The system could be put in perfect work- 
ing order within a year. Within five years the country 

227 



228 A BREED OF BARKEN METAL 

would have adapted itself to the new conditions and all 
would be peace and prosperity. 

Better than all this, usury would be dealt its death- 
blow. Each man would have what he earned, no more. 
The laborer would have the share which now goes to 
the usurer and ere long would add to that the share 
which goes to the landlord. All mankind would bn 
toilers with common rights, common interests and 
common sympathies. Prevent the tiger from preying 
and he will become as docile as a kitten. Give both 
security and the lion and the lamb will lie down to- 
gether. It will not make a paradise. The lovers of 
power at the expense of fellow-beings, the men who 
conqueror-like mount the ramparts of fame on the life- 
less bodies of their fallen kinsmen, will want none of 
it. For the man who gives a return for what he gets it 
is a start toward a nobler goal than he has ever yet 
aimed for. 

Vested interests will be proclaimed. It would be a 
contradiction of terms to say that one had a right to 
wrong a fellow-man. Yet this is what vested interests 
imply. If the taker of interest is wronging his fellow- 
man the fellow-man has a right to have that wrong 
abated, and this is the only vested right which a just 
civilization can recognize. It does not make it better 
to say that the government has from time immemorial 
allowed the ancestors of the usurer to wrong the ances- 
tors of the laborer. That is all the greater reason why 
the wrong should cease and the conscious or unconscious 
wrong-doer be satisfied to let bygones be bygones. Even 
if in our imperfect courts of law wealth has been wrong- 
fully converted, restitution will be compelled of the 
innocent beneficiar} 7 '. We cannot cavil at the justice 
of a similar proceeding in this case. But restitution is 
not asked. Let bygones be bygones. No one but a fool 
or a knave would talk of the division of property. All 
that is asked,is that henceforward everyone be allowed 
to keep his own and no more. The effect would be 
magical. 

But now comes our reform friend riding on his hobby, 
an excellent nag, to be sure, but not able to bear all 



A BREED OF BARKEN METAL 229 

burdens. "My reform will make yours unnecessary. 
Follow me!" Mistaken enthusiast, no one reform can 
make the world what it should be. There is more than 
room for all. Every reform founded on truth is needed. 
Every wheel of the social car must run in the groove of 
natural law if we would avoid soul-destroying friction 
and frequent wreck. Let us not be narrow enough to 
place one little truth before our eyes so closely as to shut 
out the sublime possibilities of God's universe. 

This sermon is particularly intended for the single- 
tax advocates who seem to pooh-pooh aught else than 
their favorite theory, and to maintain that after that 
reform is accomplished nothing more will remain to be 
done. As I take it,the doctrine is not preached by the 
leader so much as by the followers. As I hope I have 
already made evident,I have not the slightest intention 
♦of opposing land reform. It is both necessary and 
fundamental and perhaps in strict philosophy should 
come first, but it is no more fundamental nor import- 
ant than the proposed reform. In the light of both 
the past and the present, I would judge that the usurer 
has done and is doing more harm than the landlord. 
It was the usurer who, through usury, came to possess 
the land, rather than the landlord who becama the usurer. 
How land reform could reform currency or destroy in- 
terest-taking, is not at all evident. Its greatest apostle 
thinks that it would increase interest and I agree with 
him. 

As is stated above, land reform in itself is a consum- 
mation devoutly to be wished. A single-tax on land, 
if it is possible, is the most direct, certain and econom- 
ical tax and therefore the best. It is the tax which 
would prove the death-warrant of the public squanderer 
and petty tyrant. But can a single land tax be so levied 
as to take land from the grasp of the monopolist and 
speculator and deliver it over to the toiler? Will it 
nationalize land? Here is the rub. Here is where the 
remedy must fail of the ideal completeness which is 
claimed for it by its enthusiastic supporters. 

The conclusions arrived at by single-taxers are much 
better than the reasons which they give for those con- 



230 A BKEED OF BARREN METAL 

elusions. They are entirely right in the idea that the 
land should be practically, if not actually the common 
property of all. They are entirely wrong in the assump- 
tion that land values are not the product of the toil of 
hand and brain, and that nature has a greater share 
than man in the production of wealth. They are still 
wrong when they assume that it is because the laborer 
'has no share in the production of land values, that he 
is not entitled to remuneration for allowing these val- 
ues to be used. 

If the contributions of nature and of man himself to 
the needs of the race are to be compared at all, we must 
set what nature offers without any aid from man, over 
against what man adapts from the stores of nature. 
We must compare what nature does through man with 
what nature does outside of him. Otherwise our com- 
parison can mean nothing, for man is a part of nature 
and subject" to its laws. All that he has, all that he is 
or ever can be, comes to him from nature. Looking 
on the matter in this light, nature does all either 
through man or without him. But if man is to be an 
element in the calculation at all, we cannot look upon 
it in this sense. We must give man credit of doing all 
that is done through him, if we are to give him any 
credit at all. There is no other basis of comparison. 
In that sense man produces all wealth. Production is 
adaptation. Nature furnishes the material to adapt, 
but this material has no value until adapted. It is the 
adaptation, and the adaptation only which gives the 
free gifts of nature (exchange) value; and exchange 
value is the only value with which political economy 
has to deal. Nothing but human labor can adapt any- 
thing to satisfy the wants of man. Nothing else can 
produce wealth. It is the act of plucking the bread- 
fruit and eating it which satisfies primitive man's hun- 
ger. It is the labor of the herdman, the spinner, the 
weaver, etc., which turns the wool into a coat. Nature 
invariably resists this adaptation, sometimes more and 
sometimes less, so that it takes an exertion called labor 
to accomplish it. In fact the very thing which dis- 
tinguishes wealth from non-wealth, is the circumstance 



A BREED OF BARREN METAL 231 

that it was produced by man and not supplied freely 
by nature. 

If this be true, and it is incontrovertible, unimproved 
land has no value and never can have. (It has neither 
exchange nor rental value.) Any land which has value 
must have been improved. And this is strictly true in 
fact. All land commercially connected must be consid- 
ered as a whole. The surveyor's lines no more divide 
land, economically speaking, than the equator or the 
tropic of Cancer. Any improvement in any part im- 
proves the whole and it is improvement on some part 
which gives value to the whole. Improvements in New 
York City give value to land in Missouri. The value 
may be almost infinitesimal, but it is still given. Thus 
the multitudinous improvements and adaptations on 
earth incident to human civilization, and these alone, 
give value to land. This civilization and the resulting 
value which it apparently gives to land is as much the 
product of toiler's hand and brain as is any dwelling, 
any machine, any piece of work in existence. It is con- 
tributed to by the toilers in the exact proportion in 
which they produce wealth, and is as much theirs as is 
anything which they produce. The wealth or advan- 
tages produced in common by the exertion of all attaches 
itself to the land. A greater amount attaches itself to 
the land nearest the centers of greatest improvement 
and that offering, for other reasons, the least 
resistance to adaptation into wealth. Other things be- 
ing equal, land in New York City is more valuable than 
land in Hoboken, because it is nearer the center of 
greatest improvement. For farming purposes, land in 
Jersey may not be as valuable as land in Pennsylvania, 
for its proximity to market may be offset by the great- 
er resistance which it offers in raising a crop. What 
can an isolated trapper, while he remains isolated, get 
for a sealskin? Nothing. It is useful to him. So is 
the land to the isolated settler, but neither has ex- 
change value. Both increase in exchange value, both 
increase in utility, as the isolated settler or trapper ap- 
proaches the community. The skin can satisfy more 
wants in New York than in Alaska, the land more in 



232 A BREED OF BARREN METAL 

Jersey than in the wilds of Africa. They both have 
greater value in every sense. That value is given in 
both cases by the civilization built up by the labor of 
the community. Value is a product of society. 

The values contributed by the individual to the com- 
mon reservoir of civilization attach to land; the values 
created by individual exertion for individual use have 
land attached to them. The former can be enjoyed by 
access to land. The latter must come actually into the 
possession of consumers. By assuming exclusive pos- 
session of what is produced by individuals in excess of 
what is needed to supply their immediate wants, cap- 
italists are enabled to shut out laborers from the use of 
that portion of their patrimony which has crystallized 
into machinery and improved processes of production. 
By assuming exclusive possession of the land, landlords 
are enabled to shut out from them the use of that por- 
tion of their patrimony which has collected into the 
common reservoir of civilization, and can be enjoyed 
only in connection with land. But they do more than 
this: they shut them away from the land itself, which 
is the free gift of nature to all. Land values and all 
other values are created in precisely the same way. 
They both belong to the producers, but only in usufruct. 
The use of wealth other than land necessarily carries 
with it possession, and if the producer wishes to use it 
he should certainly have possession of it. Pie has a bet- 
ter right than any one or every one else. The use of 
land values carries with it, not the possession of the 
values themselves, but the possession of some of the 
land to which they attach. They are always ready for 
him who wishes to use them and has access to land. 
As the values attached to land are no more productive 
than the values attached to any other form of wealth, 
no matter how large a share one has had in the produc- 
tion of these values, he is entitled to no remuneration 
for having these values used by some one else; provided 
always that he is allowed to use them to the full extent 
to which he is capable of using them in production 

There are pieces of land to which attach a greater 
amount of this value which is the common property of 



A BREED OF BARREN METAL 233 

all, and pieces of land to which attach a less. That 
is, in the adaptation of nature's gifts, there are lines 
of greater and lines of lesser resistance, depending on 
the locality of the process of adaptation. The advan- 
tage of the locality of least resistance over greater, is 
the rental value of land. The discovery and utilization 
of these advantages, like the invention of machinery or 
the adaptation of any other of nature's forces, is due 
to the cunning of man's hand and brain. But it is due 
to no one man and no one man should receive a special 
advantage therefrom. 

If the multitudinous improvements and adaptations 
produced by toiler's hands and brain, and incident to 
civilization, have produced so-called land-values, then 
population has not. Increased population is but an 
effect of the same cause which produces increased land 
values. The erroneous idea that demand determines 
value, is at the bottom of the error. Demand is nothing 
more than a regulator, like a governor on a steam en- 
gine. The labor required to produce a thing determines 
its value. 

The land-values are produced by toilers just as truly 
as are the values of anything else. They should not be 
parceled out among toilers, because it is impracticable, 
as well as unnecessary to their full legitimate enjoy- 
ment. Rent should be left in possession of the com- 
munity, not because it is not produced by the individuals 
of the community, but because it can best be distributed 
among those who produced it, by using it for the com- 
mon benefit of all. It is merely ridiculous to hold that 
men have any right other than in usufruct to other 
property, and to deny their right to land values. Their 
rights to both are exactly the same and spring from the 
same source. They have no greater right to one than 
the other. They have a right to remuneration for the 
use of neither, for neither is of itself productive. 
Single-taxers cannot deny these principles and still re- 
tain a basis for their theory. They cannot condemn the 
landlord and shield the usurer even in theory. The 
principles which condemn interest must be invoked to 
condemn rent-taking by private individuals none others 



234 A BREED OF BARREN METAL 

will answer. The problem before single-taxers is to 
make land values truly the common property of all. 
Will the single tax accomplish this? 

We must take people as they are. The passage of a 
single-tax law will make the average citizen little bet- 
ter than he now is. It may, to be sure, be an evidence 
that he is advancing in enlightenment. After its passage 
we have merely a law to be interpreted and adminis- 
tered by men. To say that the result will be j)erfection 
is like failing to allow for friction in estimating the 
working power of a machine 

To make the remedy complete the whole rental value 
of the land must be taken in taxes, no more, no less. 
If more is taken it will ruin the business conducted on 
the land. If less, it will leave a margin of profits to the 
landlord and speculator. The assessor must, then, es- 
timate very closely what the actual rental value of the 
land is. Can he do this? Will he do this? He does 
not do it now, he does not begin to do it. In some in- 
stances he gets eighty per cent of the value of the land 
and in some not twenty. He may even assess a piece 
now and then for more than its actual value. Now he 
has a perfect guide to go by. The exchange value and 
the current interest on investments give him data which 
will lead to most accurate judgments of the rental val- 
ue of the land. The selling price of the land is a per- 
fect index of its assessable value. He fails now through 
incompetence or dishonesty. These elements must be 
allowed for in the assessor of the future. And what 
tangible criterion will he h.ave on which to base a judg- 
ment of taxable valuation. None at all. If the remedy 
is of any avail it will destroy the value (exchange) of 
land entirely. One can sell land itself for practically 
nothing. He will have simply the owner's statement 
as to what the land is worth to him, on which to base 
the assessment. He may assess 'a piece of vacant land 
as highly as a piece of improved land beside it, but as 
for assessing the improved land he will be entirely at 
sea. In the rental of improved lands the land and im- 
provements are hired out together. The assessor might 
hy an inquisitorial process find out the income of each 



A BREED OF BARREN METAL 235 

piece of improved real estate. Then he must find out 
how much of that income is due to land, how much to 
improvements. He can arrive at a conclusion only by 
closely estimating the value of improvements and de- 
ducting the amount of the income due to them from 
the whole income. He must take the owner's statement 
for this, for we have yet found no better way It would 
involve all of the difficulties which render the levy of 
personal taxes at present so annoying and unjust. 

We might say that the assessor might judge by what 
others paid. This begs the question, for the others must 
first be dealt with. We might give the land to the 
highest bidder. This would not help the matter. If a 
bidder take improved land he must pay for the im- 
provements at the owner's price or the state must com- 
pel the owner to sell at an arbitrary valuation. The 
former would defeat the law. The latter would intro- 
duce the principle of taking private property for private 
use, a very dangerous innovation. 

It is ignoring facts to say that the rate of rent is not 
now estimated on the basis of exchange valuation. 
Every man counts his land in dollars, as he does his 
capital, and estimates that it should bring a certain re- 
turn. If all were perfectly willing to tell all they 
know, the assessment might not be so difficult, but 
they are not. It is quite high-sounding as an oratorical 
flourish to say that men, like hogs, must be led to re- 
form by the prospect of gain. This is what the single- 
taxers say they offer. Gain for whom? If it is gain 
for the many, then the answer is that the many are 
often blind to their own interest, and the best of laws 
may fail through ignorance. All just laws are for the 
benefit of the many, but if all just laws were carried 
out in their letter and spirit there would to-day be no 
place for the reformer. Then the many are not they 
with whom the single-taxer has to deal. The many are 
not enriching themselves on land rents at the expense 
of the few. If the few is meant, then the proposition 
is false. The single-tax or any other just law is not 
for the personal interest of the few who fatten at the 
expense of their brothers, and can not appeal to them 



236 A BREED OF BARKEN METAL 

on that score. At least it is not for their pecuniary- 
interest, which they consider paramount to all others. 
The single-tax law is for the especial purpose of cir- 
cumventing those who thrive at the expense of their 
fellow-men, and obliging them to relinquish their un- 
just advantages. On that score it will be necessarily 
fought to the bitter end by all beneficiaries of the pres- 
ent system. The same opposition, no more, no Jess, is 
encountered by all just laws. 

Then improvements are at present made only on very 
long ground leases, fixed as to rate for definite periods. 
Would private parties or corporations improve ground 
in the possession of which they were secure for but a 
year? Could security at a fixed rate be given for a 
much longer period without jeopardizing the effective- 
ness of the law. at least as to that piece of land? 

The land reform is not only not the sole reform, but 
it presents questions and difficulties at least as grave 
as that of any other well-grounded movement. It 
seems from my present light on the subject that the 
single-tax, to be practicable, must be levied so as to 
leave some exchange value to land; or so that the state 
may absorb all interest and rent actually charged on 
land and improvements. Unused land may be taxed as 
highly as improved land in the same locality, and the 
speculation in land and extensive monopoly of this ne- 
cessity to existence would be greatly ameliorated. It 
would furnish an economical and just means of revenue, 
settling the tariff question once for all, On these 
grounds it is amply deserving of the intelligent, devoted 
support which it is receiving. But do not set it up as a 
panacea. It is a law-reform, the efficacy of which will 
depend on its administration, nothing more. 

It is true that advocates whose zeal outruns their judg- 
ment announce in sounding sentences that all wealth 
might be destroyed from the earth and people would 
tap the earth and create it again; implying that they 
►would do this without serious inconvenience. This state- 
ment is so utterly extravagant as to be virtually false. 

What was left of the inhabitants of the earth after 
such a calamity as the destruction of all wealth would 



A BREED OF BARREN METAL 287 

tap the earth and re-create enough to support them, 
but what would be left? Bands of savages in the warm 
zones of continents, where fish and game and wild fruit 
are abundant. All questions of civilization would go 
back several centuries and men would work out their 
salvation anew. This is not the question confronting 
economists and sociologists to-day. We wrestle with 
the problem of making life more satisfactory for the 
teeming, increasing millions now on earth. 

If any one doubts the truth of the above view of the 
reformer's statement, let him divest himself of all 
wealth and friends, and induce a body of mortals like 
himself to do likewise, and without even the traditional 
fig-leaf, let them turn themselves loose on bare land, 
and refusing assistance from all, "tap it" and revel in 
the flow of luxuries during a cold northern winter. 
But this is making too much of a puerile statement. 
The moral, however, is that in our present state our 
garnered wealth is scarcely less necessary than land, 
and the control of that wealth enables one to collect 
interest just as it does the landlord to collect rent. 

If rent were the only source of great and dangerous 
wealth those who own land of the largest value should 
be the wealthiest and most dangerously inclined. As a 
class farmers are comparatively the heaviest land own- 
ers; yet,as a class, they are the poorest citizens. They 
own one-third of the land and yet receive but about one- 
sixth of the product of the country's industries. 

It is' entirely certain that anything which would de- 
stroy the exchange value of land would make these val- 
ues attach themselves to other forms of wealth, and 
without some better industrial system than the pres- 
ent, what would be saved in rent would be paid in 
interest. 

It is as important that the currency and system of 
exchange should be such that every man should get all 
the benefit of the wealth he labored for as an individ- 
ual or produced as part of a great civilization, as it is 
that the land laws should be such that each should get 
a share of the land values he helps to produce. If he 
were allowed to keep what he produces as an individ- 
ual, the first requisite would be satisfied. 



238 A BREED OF BARREN METAL 

Land reformers maintain, with reason, that men do 
not produce land and hence it cannot be theirs. That 
it belongs to men individually or collectively in usufruct 
only and hence an absolute title thereto cannot be ac- 
quired. It is the birthright of all the generations Df 
men. How then can the payment of rent to the state 
give absolute title to gold or silver, iron, coal, copper, 
timber or a thousand other things limited in quantity? 
There is no generic difference in that respact between 
these and land. The process of reasoning which rele- 
gates land monopoly to the dark ages proclaims that 
at least all forms of wealth, the natural basis for which 
is incapable of reproduction and limited in quantity, 
can be claimed in usufruct only and that one man can- 
not justly charge another for their use. 

There are others of an advanced turn of mind who 
see in postal savings banks a cure for financial ills. 
How short-sighted! If the postal savings bank does 
not give the depositor interest it will have an insignifi- 
cant patronage. Other banks will. If it does, then the 
body of usurers has been increased, and the mud sills 
further oppressed. What have postal savings banks to 
do with the establishment of a rational currency or the 
prevention of interest-taking? 



CHAPTER XXXIV. 

Rksults— The destruction of interest-taking — What would follow — Division of 
wealth — Not fanciful— The advantage of the possessor of surplus wealth — Its 
results — The problem we must solve — Important natural truths — Applied — The 
rank and rile of toilers — They must work out their own salvation — The mistake 
of reforiiers — Tariff-reform— The same mistake with currency reform must be 
avoided — Insist on principles, not on details— Objectors — Their disinterested- 
ness— Some interesting questions— The millionaire — The woman of fashion — 
The Solon— Financiers— The opposition — Interest-taking before the tribunal of 
Intelligence. 

The thistle cannot be destroyed by cutting down and 
scattering it* seeds on the ground. 

Here is a means by which interest-taking, the com- 
mercial incubus of the modern world, may be removed. 
Destroy interest-taking and all men might work to- 
gether in harmony, each receiving his own. In a com- 
munity where no hoarded fortune could last longer 
than a generation, all would be obliged to work. When 
each would be obliged to work for what he got, men 
would soon find that they could work to better advan- 
tage in unison than each one for himself. Capital would 
be combined and the best adapted for each task would 
find his proper sphere. Great companies of toilers 
working together like bees in a hive would make pro- 
duction more effective than ever before. There would 
be no clash of interest as at present, no preying of one 
on another; he who advanced his own interests must 
advance the interests of all. The bitter hate and dark 
contempt of the toiler for his master and the master 
for the toiler would cease to be. The feverish problems 
of industrial rights would become clearer. 

We would hear no more of the menace and injustice 
of large fortunes. Cease to allow the Astors to collect 
rent and interest, and in five years their power would 
have fallen to the level of ordinary citizens. Their 
fortunes could not play tyrant for them. Their wealth 

339 



240 A BREED OF BARREN METAL 

would disappear slowly but surely until, sometime, that 
family must take up the burdens and live the lives of 
other mortals." They would then soon sympathize with 
others' needs. As soon as interest-taking was made 
impossible, toilers would cease to pay attention to the 
holders of large fortunes. There would be neither dis- 
position nor necessity for disturbing old fortunes. 
Wealth would rapidly accumulate in the hands of toil- 
ers, and idlers would be bra nded with the pauper's 
stamp. The pauper millionaire would become an ex- 
tinct species, like the buffalo and the bear. The march 
of civilization would have stamped him out. No matter 
how shrewd, or unscrupulous, or avaricious the money- 
getter might be, he would, without the aid of rent or 
interest-taking, be utterly powerless to oppress any one 
by the force of the wealth which he might accumulate. 
It is often said nowadays that if the wealth of the 
world were evenly divided it would within a short time 
again accumulate in the hands of the same favored few. 
Granting that there is truth in the statement, it proves 
nothing except that our laws are unjust. Leave the 
laws as they are and the unscrupulous, avaricious 
schemer will usually get the fat of the land. Put in 
force equitable laws of distribution and the differences 
in fortune will represent merely difference in ability to 
produce. Those entitled to wealth would have it. All 
would work and nobody would be obliged to toil exces- 
sively. Relieved of the leisure-bred devices of extrava- 
gant ease, our lives would become more rational and 
simple,and the frivolous exactions which now weigh so 
heavily on our time and resources would quite disappear. 
All who were willing to toil would have leisure for rec- 
reation and improvement. Art, letters, science, might 
be cultivated as pastimes by all having such inclina- 
tions. We would not have one man with an abnormal 
development of brain working among ten thousand 
dunces who could not understand his thoughts. All 
would be cultivated and intelligent. Remove the in- 
cubus of want or fear of want from man and he would 
be comparatively an archangel. Before the gaze of such 
a being, crime, like fallen man, would slink away 



A BREED OF BARREN METAL 241 

ashamed. Three pairs of hands would dispose of what 
one wrestles with to-day and the task would be light 
to each. Panics would be a thing of the past. De- 
pression could follow natural calamity only and the 
vigorous country would soon recover itself from the 
severest natural strain. Give the producer the full 
measure of what he produces and a giant stride will 
have been made toward making the earth what it is 
intended to be, a pleasant abiding place for man. Then 
and then only can we have the happiness of the fullest 
development and enjoyment of all natural powers. 

This is not a fanciful picture. It is not claimed that 
the reform suggested will make the eartli a paradise, 
but it will make it more nearly one than it has ever 
yet been. It will lay one true foundation principle on 
which future fabrics of civilization may rest secure. It 
will be transferring our social edifice from its founda- 
tion of sand to one of solid rock. 

While we give such immense advantage to possessors 
of surplus wealth, all men will strive to amass a sur- 
plus by any means, however dishonest. Men have long 
since learned that in the present order of things no one 
can ever become wealthy by his own efforts in produc- 
tion. The secret of wealth, the philosopher's stone of 
the modern world, is known to be the appropriation by 
one man of the results of the toil of hundreds. It is 
nonsense to say that a fortune of a million can be 
amassed in any other way. One might produce in any 
tangible line of industry for ten lifetimes and still not 
produce to the value of a million. How to save what 
he earns is not now the study of the man of affairs, 
but how to obtain legally the earnings of others. Every 
business man's aim under such a system is necessarily 
to take every advantage of his neighbor which will give 
himself the better of the bargain. This is "business." 
Destroy the law by which man is enabled to appropri- 
ate the results of the toil of his fellow-men and you 
remove not only his power but his motive for working 
injustice. If required to rely for fortune on what he him- 
self produced he would turn his attention to production, 
not to filching from his fellows, A race of human 



242 A BREED OF BARREN METAL 

tigers, jackals and asses would be transformed into a 
community of soulful, thinking men and women. 

There is another side to the picture. We are face to 
face with the problem of the race; viz., whether the 
many were born to be the hewers of wood and drawers 
of water of the few. Civilization has not yet begun to 
solve it. It has been put off for us by broad continents 
and virgin resources to subdue and enjoy. We have 
now reached the length of our tether. We are thrown 
back upon ourselves. Our country's prestige as a prom- 
ised land is ebbing. The rights of humanity are at 
stake. We must decide what they are and how they 
shall be preserved. 

Invention, the handmaid of industry, has been be- 
guiled to the ministry of mammon. We are plunging 
forward to the plutocratic goal on the wings of steam 
and electricity. Crises and panics have become as reg- 
ular as eclipses. 

For those who believe in manhood, in the right of all 
men to life, liberty and the pursuit of happiness, un- 
shackled by the privileges of tyrants and minions of 
self-assumed privilege; for those who deny that any 
other man has a right to rule over him without his con- 
sent, or that any one has a right to take what he pro- 
duces without giving him just return — in a word, for 
all freemen, there is but one course to pursue. Go 
back to the eternal laws of right and there lay the 
foundations for your constitutions. Take the truths 
proclaimed by nature as your polar star and let these 
guide you to the goal of justice between man and man. 

The most important natural truths, with regard to 
the body industrial, are: That wealth alone supplies the 
tangible wants of man; that no wealth produces itself; 
that he who produces it is primarily entitled to the 
wealth which he himself produces; that, therefore, he 
is not primarily entitled to that which any one else 
produces; that the laborer produces all wealth; that 
the wealth which he produces is, in itself, not only 
non-productive but comprehends the natural principle 
of decay; that, therefore, it is advantageous to its pos- 
sessor for consumption only, audits possession can not 



A BREED OP BARREN METAL 248 

be made the basis of a valid claim for any portion of 
what any one else produces; that the laborer, there- 
fore, is primarily entitled to all wealth. I have applied 
these principles. 

Not one of these truths will harmonize with interest- 
taking. Interest-taking must be eliminated before an 
industrial system founded upon true principles can be 
established. 

I have pointed out the way. The plan is feasible, the 
principles sound. Examine them, and if you find them 
contrary to truth reject them, but be sure of your case 
before you decide. The principles are not occult. Go 
to the task with a love for truth and you can under- 
stand. If you find the principles sound make it your 
aim as a freeman to establish them. It is in your power. 
You must do it all yourself. The vulture thrives on 
destruction. A great body of our people,like them, are 
growing fat on the industrial wrecks about them. They 
will oppose change. They will be specious and cun- 
ning and adroit. They will ridicule and rant. They 
have you by the throat. The power and organization 
are theirs. They will press you hard, but if the free- 
man strikes home, if he goes to the foundation and 
builds on truth, no corrupt power can overthrow him. 

The rank and file of toilers must work out their own 
salvation. All experience indicates that one having an 
advantage will never give it up of his own accord. It 
is those, then, who suffer by the present industrial or- 
ganization who must bring about a change for the bet- 
ter. Let each fair-minded citizen convince himself and 
then go ahead and see that his convictions are put into 
practical form.* It may be necessary to make a little 
compromise on detail, but on principle, never. In the 
cause of right, he who wavers is lost, and it is better 
for the community to make the change thorough-going 
at once. What would one think of a surgeon who would 
cut off a limb piecemeal, gangrened though it be, for 

*To the reformer who is really in earnest there never was a better opportunity 
than now. Men are breaking away from party control and the set of men who 
will organize a party on truly democratic principles is sure, sooner or later, to 
carry the day. If they want initiative and referendum let them first introduce 
these principles in the government of the political party which advocates such 
reform. Destroy dictatorship in party, and in the nation your work is half ac- 
complished. 



244 A BREED OF BARREN METAL 

the purpose of sparing the patient suffering? With the 
stumbling, timid citizen the case is the same. He 
wastes his energies in trifles which bring no tangible 
results until the country becomes so tired of tinkering 
that it casts aside himself and his reforms. 

This has been the fatal mistake of tariff reformers. 
If they had done what the people authorized them to 
do, this country would be rid to-day of the idiotic spirit 
of narrow provincialism which has attenuated the great 
Chinese Empire into a second dotage. International 
intercourse is the only civilizer yet discovered. Instead 
of that, the majority of citizens are proclaiming the 
beauties of exclusion and protection from the house- 
tops. • They are advocating a principle in economics 
infinitely more absurd than the physical fallacy of per- 
petual motion. 

Let not the same mistake be made with currency re- 
form. Free coinage of silver, real bimetallism, if once 
completely carried into effect in a rational way, would 
probably be a considerable improvement on gold, but 
the relief afforded by such a measure would be entirely 
disproportionate to the pains required to bring it about. 
It would be another case of the mountain and the mouse. 
The citizen would down the gold-bug for the silver 
beetle, and the "pale drudge" would soon be found to 
be as inexorable and brutal a master as the yellow ty- 
rant which it had succeeded. A change in the financial 
system is inevitable. It is the burning question of the 
day. When it comes let it be such that those who 
work and suffer for it can point to its fruits with pride 
and satisfaction. The change must be for- the benefit 
of the whole people. The only change in the financial 
system which will benefit the whole people is one which 
will destroy the monopoly in money, take it from the 
hands of the usurer, and make it the instrument of ex- 
change accessible to all who have wealth to exchange. 
It must be a currency whioh will put all men as nearly 
as may be on an equal footing. It must make it as 
easy for the producer of any other wealth as for the 
producer of silver or gold to get a dollar. This may 
be accomplished by the proposed system. It is the 



A BREED OF BARREN METAL 245 

only system by which it may be accomplished. I sub- 
mit it for the consideration of all thinking, honest citi- 
zens. 

I do not insist on details, but I maintain that any 
sound system of currency must be issued on wealth for 
sale alone, must be issued for all wealth in the process 
of exchange, must be issued to any one holding exchang- 
able wealth and furnishing security. That the stand- 
ard must depend on the labor unit and not on the price 
of any commodity, and that the money token must 
have substantially no value. I insist further that the 
holder of currency must be required to bear the burden 
of care and deterioration of wealth. Above all, I insist 
that the currency and banking system must be con- 
ducted by the government only, in such a manner as 
to destroy interest-taking. 

It is in such a reform and this alone that the toiler 
must look for a betterment of his condition. There is 
no other reform which will take its place. It will not 
take the place of all reforms, but it is vastly more im- 
portant than any other yet proposed. It lays the ax 
to the root of the evil. 

Now come forward, all ye usurers and money sharks, 
and sleek, fat, oily bank presidents and officers of loan 
and trust companies, and tell with divine unctuousness 
how the proposed currency measures would ruin the 
country and oppress the toiler. Come forward beaming 
with an ineffable light of pure disinterestedness and 
charity unadulterate, and oppose it because it would 
ruin the laborer and small shopkeeper. Of course you 
have never given a thought to its effect on your own 
pocketbooks and privileges. The altruist in you will 
not admit of that. You who in the extreme goodness 
of your souls lend for six per cent when you cannot get 
twelve, and make a thousand by driving some unfortu- 
nate to the wall when you cannot get advantage suffi- 
cient to make a million, should be listened to as divine 
oracles of the interests of the rank and file. And the 
business of shaving notes and exacting usury and en-, 
gineering corners gives you such a monopoly of polit- 
ical and economic knowledge that he would be rash 



246 A BREED OF BARREN METAL 

indeed who would question your inspired conclusions, 
especially when he knows the source of inspiration. 

Oh, no! the people can never understand finances, we 
could not ask them to try while we have such an ex- 
tremely well-paid and well-informed body of moneyed 
aristocrats to give the government all the advice it 
wants as to the financial needs of the people! And it 
has been always so clearly shown that a man will work 
against his own interests to further the interests of some 
other person. And this is so characteristic of the usurer. 

It would be lit.tle short of a calamity if the people 
should come to understand the financial question, for 
they are always so perverse that their understanding 
of things differs materially from the understanding of 
their millionaire friends, and this would be no excep- 
tion. 

And you millionaires who serve your country by 
drinking foreign wine, attending horse-races and de- 
bauching, come up and tell of your divine right to be a 
charge on the public. Tell of the injustice of making 
you work like other men. P.oint out the particular day 
and date that your father consummated the theft of a 
railroad and thereby secured luxurious, idle existence 
for his posterity for all time. Tell how harassed you 
have been in passing time away, and really how beastly 
dull it is eking out existence with nothing useful to do. 
Tell of your trials and worries as though such a tale of 
woe were a reason why such a state of affairs should 
continue. 

Then tell us how useful your foreign or domestic 
pleasure-seeking was to the toilers who sweat three 
hundred days in the year; how necessary it is to have 
a castle or a hunting park in Scotland in order to carry 
on business in America; show how, in spending your time 
in pleasure, you were giving such sage management to 
business thousands of miles away that your services 
were really indispensable to the toilers of the land, and 
without you really they could have accomplished noth- 
ing. Tell whether it was yacht-racing or banqueting 
or gambling which won for you the titles of captains 
of industry, and define the duties of that particular 



A BREED OF BARREN METAL 247 

rank. It would be a long and interesting story, no 
doubt, for the millionaire to make clear his usefulness 
to the world which pays him tribute, and give an ac- 
count of the right he has to what others produce. 

Then it would be so interesting for some of our scions 
of wealth to analyze the motive of philanthropy, which 
prompts the man who has all that millions can buy 
to try to make his name and the name of his family 
immortal by erecting himself a monument in endow- 
ing institutions of learning within whose walls plutoc- 
racy must find its stronghold with money wrung from 
overworked, ignorant and degraded laborers. Institu- 
tions controlled by millionaires where the fair goddess 
of knowledge is prostituted to the lusts of mammon, 
and truth is crucified to protect and perpetuate the ill- 
gotten wealth of unscrupulous plutocratic tyrants. 
That is, no doubt, a high type of philanthropy which 
seeks selfish ends under the cloak of public good. It is 
morally so much better to give in charity even what we 
wrongfully get than to leave what we give in the -hands 
of those to whom it belongs, and allow them to use it 
as they find most advantageous. It is such a balm to 
the filcher to know that the wealth would be wasted 
if he had not taken it and cared for it, for himself. 

Then the women of ease might take the rostrum and 
tell, the dear things, how their dreadful sisters would 
persist in refusing to take from the wealthy shoulders 
every earthly burden and allow God's chosen creatures 
to give themselves up body and soul to social vanities; 
to become the puppets of men of wealth or slaves to a 
senseless fad. What a frightful world this would be if 
every one with health and strength were obliged to help 
himself or herself and if on.e one-hundredth of the peo- 
ple could not look down in benign complacency on the 
other mass of dolts and lackeys and give them their 
pitiful scorn! The rest of the people were really made 
as a sort of instrument for developing and amusing 
these chosen ones, and anything which would change 
such a state of things would make life entirely stale, 
flat and unprofitable for the chosen few. As for the mud 
sills themselves, they do not count. 



248 A BREED OF BARREN METAL 

And you learned Solons who have grown gray in pulse- 
feeling and declamation, ye hoary temporizers who will 
give the people as little as possible, and proclaim that 
that little is a boon from the goodness of your souls, 
let your voices be raised in defense of "honest money," 
the glittering food of Midas, the shekels of the Shylock. 
Parrot platitudes which you do not take the trouble to 
understand. Conjure up the grim shades of Hamilton 
and Chase, who preached gold and used paper in its 
worst form. Ee-echo the sentences- of the long line of 
bankers and money-lenders who have fully half a dozen 
times by the power of that gold brought the country to 
the verge of bankruptcy. Put on the brakes firmly and 
show that a shining yellow toy is the only instrument 
which civilized man can devise to carry on his trade 
with his fellow-men. You will need all of your resources, 
for the struggle of freedom with their golden fetters is 
at hand. 

Let the Rothschilds and their Cockney confreres come 
forward and save the dear toilers of America from 
ruin. Let these usurers who for centuries have drawn 
a steady stream of wealth into England from all quar- 
ters of the world, by the aid of the gold insanity, tell 
how dangerous it would be to detach the tentacles of 
the gold octopus from the industries of the world. Let 
them point out the magnitude of the calamity of ceas- 
ing to pay billions each year to the syndicate in the 
control of the gold of the world, for the control of that 
gold. Yours will be an interesting story. But every 
citizen of the country has a stake as dear as you — his 
life and happiness. Do not assume that you alone have 
a right to be heard.* 

All you who thrive by taking part of what he pro- 
duces from your laboring brother, will be expected to 
fight a rational currency system to the death. You 
have cunning and knowledge and the power it gives, 
but the waves of popular discontent are surging against 
the fetters of iniquity and wrong. When the pressure 

#1 do not hold for a moment that the wealthy are not personally as virtuous as 
the poor, and, under like circumstances, would be governed by like motives; but 
it would be flying in the face of all experience to expect them to voluntarily give 
up the industrial advantages which the present order gives them. 



A BREED OF BARREN METAL 249 

becomes too great the golden bands will go with the 
rest, and we will awaken after the deluge to a regen- 
erated and revivified industrial system. Interest-tak- 
ing is being tried as never before, and this time the 
inquisitor is intelligence instead of superstition. It 
cannot fail to fall, and on its ruins must be built the 
new and just financial system. 



CHAPTER XXXV. 

A Vision — A promised land — The armies of toil— The attendant specter — Two 
goals— The giants of the furnace — The pale-faced, cunning man — The specter 
of want and the specter of sham— Why?— The solution — "Toil or perish" — The 
crisis — A transformation— The end. 

"Saw a vision of the world and all the wonder that 
would be." 

I see before me a country fair to look upon. Its grassy- 
slopes are animate with herds and flocks, its smiling 
valleys wave with wheat and corn. Its broad rivers 
stretch away to the great ocean, bearing upon their bos- 
oms wealth untold. The sun-kissed spires of great cities 
stud the banks and spread away over the gilded hills. 
Mighty lakes float a commerce never dreamed of by 
Carthage, Sidon or Tyre. The oils and silks and spices 
of the East mingle in lavish abundance with the meat 
and corn of the West, in bursting palaces of wealth. 
Rugged mountains lift their giant forms and shake 
from their dripping flanks the refreshing dews of heaven 
upon the teeming life of the mellow plains and hills; 
or oppose their broad backs to the storm king as he 
rages in destructive fury upon their precious charges 
which sleep beneath the sun. The ample strong-boxes 
of those rugged mountain kings are filled with treasure 
of iron and lead and coal and silver and gold and oil, 
and the hale, generous guardians toss back the keys and 
invite the millions of the earth to help themselves. 

Glittering bands of steel knit together ocean and lake 
and river, mountain, hill, valley, dale and woodland. 
The locomotive, the shuttle of industry, flies to and 
fro weaving the warp and woof of national prosperity. 
It is a scene fit to gladden the hearts of archangels. 

Again I look upon the enchanting scene and I see it 

250 



A BREED OP BARREN METAL 251 

instinct with life. About the teeming valleys and sunny 
hills are seen the images of God above. I draw closer. 
There is an intense earnestness in those pinched and 
sun-browned faces, shaded by sere and withered locks. 
Grim, wiry forms in somber-hued rags bespattered with 
dust and grime, move to and fro. Thin, bony fingers 
clasp, with the iron grasp of toiling brawn, curiously 
wrought contrivances of many shapes. The dull, som- 
ber eyes gleam with resolution as the lines move along. 
It is a battalion of the army of toil assaulting the 
treasure-house of mother Nature The scorching sun 
directs his burning shafts full upon the hosts, but they 
flinch not. Great beads stand on their throbbing fore- 
heads as they stare the flaming monarch full in the eye, 
but they waver not, nor pause in the earnest strife. The 
heavy ax resounds, the ploughshare grinds the pe bbly 
soil, toppling forests crash, the garnering sheaves send 
out their furnace glow, but not a line is broken. The 
grim column marches on. 

A cloud of anxiety darkens each sunburnt brow. 
Some far-off goal never to be attained, seems dimly in 
sight. Each casts a furtive glance behind, then 
startled, turns and toils toward some distant goal. I 
look and wonder what is the prospect which gives the 
toiler's eyes that dull, eager look, and at his shoulder 
I perceive a dim, formless thing, the ghastly specter of 
want. As the toiler pauses in the arduous conflict, I 
see this hideous monster raise his skeleton arm and 
point menacingly his bony finger to a great chill man- 
sion beyond the hill, then with a leer, to the sought-for 
distant goal. 

The dull pyes of the toiler forever wander there. 

All about the chill mansion across the hill are groups 
of men and women whom the weight of toilful years is 
bearing to the earth. The knotted limbs but half bear 
up the shrunken bodies, and the locks, whitened by the 
frosts of time, toss about over faces from which the 
light of hope has fled, and left a blank waste or pa- 
thetic second childhood. It is there, to the almshouse, 
the specter points and leeringly contrasts it with the 
cottage of peace and plenty beyond, always far beyond. 



252 A BREED OF BAEEEN METAL 

The eager eyes strain harder, the toiling muscles knot 
and the struggle with nature for competence is pursued 
with redoubled force. There is no rest, no stopping for 
breath. Ever present by the toiler's side is the grim 
specter to remind him of the almshouse or the cot of 
peace. He groans as lie sees his fellow soldiers drop 
their worn weapons from their enfeebled hands and 
shamble off in the tottering procession to the chill 
mansion across the hill. 

My eye wanders from the open, sun-kissed fields and 
the grim army struggling there, to the spire-decked, 
mansion-studded cities. There is a great black building 
where the turbid river tide chafes against the murky 
bank. Its walls are grimed and smoke-stained and 
its windows fliick and gray. I look within. A band 
of giants are gathered there, stripped as for a mighty 
conflict. The tense muscles knot on the sturdy bare 
arms and chests. Great drops of sweat stand upon their 
brows. Their faces are dull and sullen as they gleam 
with a weird distinctness in the fierce white glare of 
the great hot furnace. Its dull radiance lights up the 
great rafters and soot-festooned nooks, and lends a sort 
of unearthly glow to the whole dark scene. This is 
another battalion of toil, meeting face to face and sub- 
duing for the cause of man the tyrannous hosts of nature. 

The same eager look suffuses each pale, smoke-grimed 
face. The same grim resolution, softened now and 
then by indifference or reckless insouciance. The same 
goal is far ahead, the same grim specter at each shoul- 
der, the same bony finger and the same cunning leer. 
But close beside the gloomy mansion across the stream, 
surrounded by the wrecks of toil and years, are the cold 
gray walls of a great chill building through whose nar- 
row barred windows the sunlight never falls on the de- 
fiant, scowling faces within. And as the giant of the 
furnace follows with his glance the specter's bony finger 
along the dusty road beyond, he sees an unkempt, be- 
sotted face staring from shaggy locks, and a form 
scarcely human staggering along in a mass of filthy 
rags, — the tramp, the derelict of the highways of earth. 
The specter seems to laugh a low laugh of satisfaction 



A BREED OF BARREN METAL 253 

at the scene, but the furnace's fiery eye has fewer ter- 
rors for him than the scene without, and the giant 
plunges again into the thought-devouring conflict. 

Dazed, I turn from the scene and look around for a 
fairer prospect. But wherever I go I see beneath the 
surface the same grim, unrelenting conflict. In the 
sightless depths of the dark mine, in the balsam-laden 
forest glades, on the rugged mountain slopes, in the 
broad harbors, upon the tall ships, behind the Hying 
locomotive, in the stony, sun-parched streets, in the 
sickly, nauseating tenement, in the stilling, overcrowded 
factory, I see battalions of the same army pursuing the 
same relentless strife. The same sordid eagerness lights 
up the eyes; the same fixed determination, the same 
despair, hold sway by turns over the stolid features. 
The same, whether the face be the pinched and sun- 
browned features of the son or daughter of the soil, 
the bleached cheek of the sturdy giant of the furnace 
or shop, or the delicate brow of the pale girl of the 
factory or tenement. 

Why this terrible, unending, hopeless strife, embit- 
tered by the unbroken presence of the grim specter of 
want? Can such a promising exterior of beauty, peace 
and plenty, hide but care, woe, dread and disappoint- 
ment? Why this unrelenting, hopeless toil, why this 
pathetic ending? Why the almshouse, the prison, or 
the inclement road, with its menacing human derelicts, 
as a reward for years of toil? Where then is beauty 
and happiness? Is this fair earth but a chamber of hor- 
rors masked with a glittering tapestry? 

My eyes again wander along animated streets of fair 
cities, where tall piles of steel and brass and stone and 
marble rise. Within close bat sunlit rooms, I see pale 
faces pouring over broad books. That same look of 
eagerness and care is to be seen, but a cunning light 
lends vivacity to the face. The restless eyes glance 
furtively over the pages as the brows knit and the form 
sways to and fro. The specter is entirely absent or but 
dimly visible, but the eager eyes still strain toward 
some coveted object beyond, a formless thing encased 
in golden robes bedecked with jewels. It is a deity 



254 A BREED OF BARREN METAL 

never met face to face, but known to fame and fable as 
the Goddess of Success. I am interested. I follow the 
pale-visaged votary as he descends in the iron car and 
rolls noisily away to the broad avenue, beyond the 
work-a-day turmoil of the city streets. I follow him 
up the marble steps into the tapestried and cushioned 
drawing-room. I follow him even to the banquet 
board, I hear the glasses clink and see the red wine 
flow. I hear the rustle of silks and see the forms of" 
delicate women flit about under the mellow glow of the 
electric lamps. I hear merry voices and mirthful 
laughter, but in it all is a minor note of discord, a 
harsh, grating, sordid sound. That eager gaze, still, 
distorted features, even flushed with wine. The laugh- 
ter pealed and rolled and rung, but more and more 
became a senseless, hollow, mocking sound, an almost 
frightful thing. The looked-for happiness was not there. 
And I found it not on the wave-kissed sands, among the 
free, unconventional crowds of merry-makers; not in 
the salon, nor the yacht, nor the theater, nor the lec- 
ture hall, nor at the concert, nor the church, nor the 
ball ; but instead the same hollow laugh of unreal mirth, 
the false, jarring note, the same eager look. The spec- 
ter of sham was as constantly present among the bat- 
talions of fashion and pleasure as was the specter of 
want among the battalions of toil. The chamber of 
horrors was still there, even though the.. gilding was a 
little more ingenious. I looked and listened and asked 
why. 

An imperative desire took possession of me to know 
whence came all this cruel fear and bitter unreality in 
a land of beauty and plenty. I watched and saw again 
the army of toil plunged into the contest, the enemy 
the formless thing of yore. Fast and sullenly did the 
toiling army pile between them and the bony monster, 
Want, stores of the thing men call wealth. It seemed 
the only barrier between them and the dominion of the 
monster's rule. As they turned to wrest from nature 
still more and more, to raise the barrier higher, other 
brawny giants step boldly up, and seizing from the 
barrier Avhatever they desire, bear this wealth away to- 



A BREED OF BARREN METAL 255 

ward the palaces of pleasure and the mansions of the 
pale-faced men with the cunning eyes. - These pale-faced 
' men watched and directed that it be put away to ap- 
pease the all-devouring goddess of luxury and success. 
But even the brawny men who bore this store of wealth 
to the shrine of the gilded goddess kept but a little to 
protect themselves, and the specter was also ever at their 
backs. I saw now and then a grim-faced toiler look up 
and see his painfully accumulated store disappear be- 
hind the strong doors of his pale-faced neighbors. He 
would look at the messenger of the votaries of success 
coming back always empty-handed for more, and scowl 
until the bony finger of the specter would remind the 
man who stopped to think, of the grim horrors of his 
domain, and the toiler would sullenly bow his head 
and toil again. I saw a cordon of sturdy men, the 
strongest of the land, drawn about the store-houses of 
the pale-faced, cunning men, and the rations of these 
guards were also taken from the meager barrier which 
the soldier of the battalion of toil placed between him- 
self and want. 

There seemed an unwonted movement in the toiling 
ranks. A few bolder than the rest dared to stare the 
specter in the face and watch as their stores were trans- 
ferred to the houses of the votaries of pleasure and suc- 
cess. Soon they noticed that not one of those pale-faced, 
cunning men took part in the battle against the com- 
mon enemy, Want, but bent all of their cunning energies 
to carrying away and appropriating the barriers which 
the battalions of toil reared against the implacable foe. 
Even those who did the work of taking away the wealth 
were toilers like themselves. 

First they stood dazed by the revelation, awed by 
their disappearing defenses, then with a courage born 
of desperation they called to their companions to look. 
The knotted sinews relaxed and the dull eyes opened 
wide. The pale-faced, cunning men pointed to the 
specter who hissed in low, chuckling tones: "Toiler 
perish." The whole chamber of horrors was displayed 
before the toiler's eyes. The almshouse and the prison 



256 A BREED OF BARREN METAL 

and the derelict-haunted road, even to the nameless 
•grave in the potter's field. As the battalion leaned upon 
its arms the bony finger lifted the veil. There before 
him appeared the suffocating tenement where chill 
death painted black shadows around e} r es gleaming 
with fever. Parched infant tongues, furred and hot, 
panted in vain for. the saving draught. Haggard, faint- 
ing mothers tottered empty-breasted over dying babes. 
Cold, dank basements, reeking with filth, sheltered men 
turned to brutes and children transformed to savages. 
The whole panorama of distress is seen ; the pale-faced, 
cunning man leers at each detail, but still the grim 
hosts of toil stop and look. I hear a low voice hiss, 
"Toil or perish 1" but the host moves not. There is a 
desperate gleam in eager eyes and a dark scowl on each 
sullen face as they see their hard wrought store disap- 
pear and leave them to the mercies of the monster Want. 

"By what right?" arises in a hoarse whisper and is 
caught up until it becomes a mighty chorus which sends 
a thrill of fear through those of the cunning eyes and 
makes their pale faces darken. "By the right and au- 
thority of the law of which these are the conservators, " 
hiss the pale-faces with a sneer, and they point to the 
cordon of blue-coated giants who stand between the 
toilers and their fast-disappearing stores. Grim mutiny 
appears in every haggard toiler's face. If the law is 
against them, their case is desperate indeed. Soon I 
hear a murmur rise, "Let us change the law,the law is 
ours." It is caught up slowly at first, then faster and 
faster by the sullen ranks, until it becomes the general 
war-cry of the whole host. 

The cunning eye becomes sinister, the soft-handed 
captains argue, then threaten, then plead. They call 
upon the blue-coated giants to preserve inviolate the 
rights of property. They point out to these that with- 
out such hoards to protect, a large part of their occupa- 
tion would be gone. But the blue-coats remain stolid. 
The power was then on the other side and it would be 
folly to try to stem such a current. They could not if 
they would. There was still one resort: the gladiator 
battalions whose business it is to kill. 



A BREED OF BARREN METAL 257 

But they too were foiled. No law had been violated, 
it had been but changed, and the chances of a conflict 
against such a force with law on its side were not the 
best. The soldier did not budge. 

There are menacing faces in the ranks of toil, hot 
indignation goads these hardy men to violence as they 
see the pale-faced, cunning men plotting to defeat the 
law, but calm-browed brothers step before their wrath 
and admonish them to patience. "The law is ours. 
We have no need of what is stored away in their pos- 
session. Let us keep our weapons, the instruments of 
toil which we now use, and let them have the rest. 
Let the dead past bury its dead. " 

The pale faced, cunning ones stand aghast. They 
see the whole world of industry move along without 
the slightest relation to them. They see men of their 
class fast taking places in the ranks, glad to have their 
wealth used and preserved for them, and their toil re- 
munerated, simply as the toil of others. The stores of 
toil rise high, and the grim specter slinks away. His 
course is even to the domain of pleasure and success, 
even to the abiding-places of the bediamonded goddess 
on her gilded throne, whom men were so wont to wor- 
ship. Even the old menace of the specter of want is 
turned toward the frivolous and gay of yesterday, as 
the stores of toil disappear from their palaces. The 
chamber of horrors now exists for them. The pale-faced, 
cunning man is no longer serene in his security. His 
appeals to police and soldier are alike in vain. He sees 
the blue cordon which formerly existed for him, wheel 
about and bar him from the stores which the toilers 
gathered. Then one by one those sturdy conservators 
of the law disappeared into the toiling ranks. 

Then the pale-faced, cunning man grew gracious. 
Yes, he would give to the legions of toil for their use 
all that he had if they would but give him the increase. 
He was met by a merry, hearty laugh. "Increase in- 
deed! that is a fiction of other days. 'Tis toil, and 
toil alone which increases; come, be one of us, 1 ' and 
instruments of toil are placed in the soft, white hands. 
Slowly, reluctantly, he takes up the fight against the 



2bS A BREED OF BARREN METAL 

now disappearing specter of want, the specter who now 
hovered near the palaces on the hill. 

I looked and even the terrors of the horror chamber 
were disappearing. The pinched, sullen faces of the 
days gone by had brightened. They were softer and 
had lost some of that eager look. The incubus of the 
dread of want had lifted. There was no specter con- 
stantly menacing those who worked. No visions of the 
almshouse or the potter's field, of famishing babes and 
starving mothers. The mine, the shop, the forest and 
the field were filled with rosy, beaming faces The 
faces in the sunlit offices are uol so pale, the eyes not 
so hard and cunning The throbbing trains bear their 
precious burdens of human freight, but it is not the 
sordid worshipers of sham. The gleaming shores of 
the broad oceans have their crowds, but what a change 1 
The shrines of luxury, frivolity, pride, licentiousness 
had been transformed into the IVIeccas of mirth-loving, 
healthful toilers on happy holiday outings. The palaces 
of sham and mammon had become palaces of art. The 
earth had its bright fruits and flowers and balmy winds 
and grateful suns alike for all. The fair exterior of 
placid streams and sunny hills and teeming valleys and 
rugged mountain slopes were bui the outward expres- 
sions of the peace and happiness within. It was the 
happy home of a transformed man. 



THE END. 



